Interim Commission to Study Fiscal Stability (11/04/2009)

Final
STAFF SUMMARY OF MEETING

INTERIM COMMISSION TO STUDY FISCAL STABILITY

Date:	11/04/2009	ATTENDANCE

Time:	09:12 AM to 05:20 PM	Brophy	*
		Court	X
Place:	HCR 0112	Gerou	X
		Morse	X
This Meeting was called to order by		Boigon	*
	Senator Heath	Conway	X
		Cooke	*
This Report was prepared by		Coors	X
	Christie Lee	Fagan	X
		Hume	E
		Knox	X
		Lynne	X
		Neilson	X
		White	X
		Ferrandino	X
		Heath	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Bill 4 Bill 5 Bill 6 Bill 1B Bill 2 Bill 3		Move Bill 4 to Legislative Council Move Bill 5 to Legislative Council Move Bill 6 to Legislative Council Move Bill 1B to Legislative Council Postponed Indefinitely Move Bill 3 to Legislative Council

09:16 AM -- Bill 4

Senator Morse, prime sponsor, began by discussing Bill 4 entitled Higher Education Flexibility. Senator Morse commented that the bill was drafted with assistance and input from college presidents from state institutions of higher education and representatives from community colleges. He stated that the ultimate goal of the bill is to save the state higher education and community college systems in Colorado. These institutions are economic drivers for Colorado's economy and are vital to the business community throughout the state.

Senator Morse continued to discuss the budgets that will need to be cut for institutions of higher education in Colorado. He commented that sections 14 through 16 need more work and should be struck from the bill. The commission engaged in a discussion on striking sections 14 through 16 to allow more changes to be made before the final bill is introduced in the upcoming 2010 session. The discussion continued and Senator Morse noted that there is no provision in the legislation that addresses tuition flexibility.

The commission discussed each section of the bill and questioned whether the bill would offer institutions of higher education budgetary flexibility to adjust to the recessionary effects of the economy. Senator Morse continued the discussion by commenting on section 12 and the provisions that would give flexibility to colleges to save money.

The discussion continued on whether there were any cost savings attached to sections 14 through 16. Senator Morse reiterated that any references toward "tuition flexibility" are off the table. The committee continued the discussion on the complexity and importance of provisions within sections 14 through 16. The motion to amend the draft bill by striking sections 14 through 16 passed on a 4-2 vote.

Representative Gerou asked that the bill be further amended by striking section 12 (PERA provisions) given the economy and the decline in value of the PERA portfolio. The motion passed 5-1. Representative Gerou continued by making a motion to strike sections 8 through 10. The motion passed 6-0.

The commission took final action on Bill 4 by moving it, as amended, to Legislative Council. The motion passed on a 6-0 vote.


BILL:	Bill 4
TIME:	09:29:11 AM
MOVED:	Morse
MOTION:	Amend Bill 4 by striking sections 14 through 16. The motion passed 4-2.
SECONDED:
		VOTE
	Brophy	No
	Court	Yes
	Gerou	No
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 4 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	Bill 4
TIME:	10:19:51 AM
MOVED:	Gerou
MOTION:	Amend Bill 4 by striking Section 12 (PERA provisions). The motion passed 5-1.
SECONDED:
		VOTE
	Brophy	No
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 5 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	Bill 4
TIME:	10:40:54 AM
MOVED:	Gerou
MOTION:	Amend Bill 4 by striking Sections 8 through 10. The motion passed 6-0.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	Bill 4
TIME:	10:49:01 AM
MOVED:	Morse
MOTION:	Move Bill 4, as amended, to Legislative Council. The motion passed 6-0.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	Bill 4
TIME:	11:00:49 AM
MOVED:	Morse
MOTION:	Moved to pass bill as drafted (no safety clause) and allow the Office of Legislative Legal Services to make technical changes as needed. The motion passed on a 6-0 vote.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 6 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: PASS

Senator Morse said he would be the prime sponsor in the Senate and Representative Ferrandino would be the prime sponsor in the House. The remaining members agreed to be cosponsors.

11:02 AM

Recess.

11:17 AM -- Bill 5

Senator Heath moved to refer Bill 5, entitled a comprehensive tax study, to the Legislative Council. After the motion was made, Senator Heath discussed the funding for the tax study in the bill and pointed out that it would be funded by the private sector and not with General Fund money. Senator Heath moved to amend the bill, page 2, line 7, to clarify that the study be performed by Denver University. The motion passed on a 6-0 vote. The commission took final action on the bill by moving it, as amended, to Legislative Council. The motion passed 6-0.


BILL:	Bill 5
TIME:	11:22:00 AM
MOVED:	Heath
MOTION:	Move to amend Bill 5, page 2, line 7, to be performed by DU funded by private sector. The motion passed 6-0.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	Bill 5
TIME:	11:36:02 AM
MOVED:	Heath
MOTION:	Move Bill 5, as amended, to Legislative Council. The motion passed 6-0.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

Senator Morse said he would be the prime sponsor in the Senate and Representative Court would be the prime sponsor in the House. The remaining members agreed to be cosponsors.

11:40 AM -- Summary for Bill 6 Constitution Revision Commission

Senator Heath moved Bill 6 and explained that the bill would create a concurrent resolution that would submit a change to the Colorado Constitution to the voters asking for the creation of the Fiscal Policy Constitutional Commission. Currently, the Colorado Constitution may be amended by a measure referred to the voters by the General Assembly or by an initiated measure. Bill 6 is a concurrent resolution that creates a third way to amend the constitution through the creation of a temporary fiscal policy constitutional commission.

The commission is created for the purpose of reviewing the fiscal policy in the state constitution and, if appropriate, submitting one or more measures to amend the state constitution to the voters at the 2012 general election. Nineteen members are appointed to the commission by representatives from the legislative, executive, and judicial branches of state government for a term that is just over one year long. A member of the General Assembly or a statewide officeholder is not eligible to serve on the commission. Members may only be appointed to the commission if a certain amount of money is donated to the state and deposited in a newly created cash fund for the purpose of paying the expenses of the commission. All commission meetings are open to the public. Members of the commission are only reimbursed for actual and necessary expenses incurred while performing duties related to the commission. The Office of Legislative Legal Services and Legislative Council Staff will provide staff support to assist the commission in its charge. The commission may only submit a measure to amend the state constitution, which may include more than one subject, if:

the commission has conducted at least one meeting in each congressional district in the state;
the measure is approved by at least 10 members of the commission; and
the measure relates to fiscal policy.

The commission must submit a measure to the Secretary of State in order that the title board may establish a ballot title and submission clause for each measure in a manner established by the concurrent resolution. The commission may withdraw a measure from consideration as a ballot issue by notifying the Secretary of State of the withdrawal. The General Assembly must conduct public hearings on each measure that is to appear on the ballot and make a recommendation to the voters to either approve or reject the measure, but it may not change a measure. The concurrent resolution also requires a measure to be printed in the 2012 blue book and 2012 session laws.

11:48 AM -- Lunch

The committee recessed for lunch.

01:05 PM

Senator Heath requested that Ms. Lynn talk about Bill 6 since she sat on the University of Denver panel that met in 2007 and reviewed the state constitution. She talked about the panel's make-up and the report that came out of it: Foundation of a Great State http://www.du.edu/issues/reports/2007SIPReport.pdf. She talked about the various groups the panel heard from, including elected officials. Ms. Lynne explained that the panel did not change the citizen initiative, the signature requirements, and did not request a constitutional convention.

01:15 PM

Mr. Conway discussed the impacts and his concerns with having the Chief Justice of the Supreme Court make appointments to the commission. There was a discussion regarding the judicial appointments. Ms. Oliver Cooke asked whether the charge in Bill 6 is the same charge as the Fiscal Stability Commission and asked why the bill kicks the commission's responsibility to another commission. Senator Heath explained that the job was too big to complete in only 12 days. Senator Heath was asked to discuss the fiscal impact of the commission. Senator Heath explained that the bill includes private funding. Mr. Coors said he was concerned about private funding and people buying a seat on the commission. A discussion ensued regarding private funding. Representative Court pointed out that the bill will need approval of two thirds of the House and of the Senate. Ms. Neilson asked how it is possible to allow an exception to the single subject rule for ballot initiatives. Mr. DeCecco, Office of Legal Services drafter, explained that the bill allows an exception to the single subject rule for the commission. Ms. Boigon asked why the bill bypasses the legislature and creates a commission to initiate ballot measures instead of just allowing this to happen through an initiated measure. Senator Heath responded and Mr. Coors said he was concerned with the fact that the bill would allow 18 nonlegislative members to create fiscal policy for the state of Colorado. The members discussed the process the commission in the bill would need to go through to place measures on the ballot. The members debated whether a measure should be allowed to go directly to the ballot without signatures.

Ms. Oliver Cooke expressed her concerns with the bill, including the fact that the Long Term Fiscal Stability was charged with unwinding the fiscal issues in the constitution. She said she is strongly opposed to the bill. Mr. Conway stated that he has some issues with the bill. He talked about the bill removing citizen participation and legislative oversight. Mr. Conway said he feels the bill takes away representative government. He also said there are some unintended consequences and discussed the Chief Justice of the Supreme Court's appointments to the commission. He said he does not support the bill.

Ms. Boigon said she believes referring the fiscal policy question to the voters is good, but said she is struggling with the fact that the commission can refer measures directly to the ballot once it is created. Ms. Boigon said overall she supports the bill. Mr. Knox said he is comfortable with the amount of public input in the bill and supports the bill. Ms. Neilson said she does not support the bill for the previous reasons she mentioned. Mr. Coors said it is import for the commission to allow the citizens to make an educated decision and talked about the blue book that is distributed to voters every ballot year. He explained that by eliminating the single subject rule, citizens will have to approve a whole bucket of changes rather than one at a time. Mr. Coors said he would vote no on the bill.

Mr. White said he feels something has to be done with the fiscal mess in Colorado and that the voters have a chance to vote the commission down if it does not want it to go forward. He supports the bill. Mr. Fagan said he supports the bill. He explained that the people will decide whether they want the commission to have the power to initiate measures directly to the ballot next year if the concurrent resolution passes. Mr. Fagan explained that under the deadline in the bill, other ideas can be placed on the ballot in response to the commission's suggestions also. Ms. Lynne said the bill provides enough protection and multiple levels of review by the public. She is in support of the bill and seconded Ms. Boigon's comments. Senator Heath explained that the bill creates another means for the public to be involved and the outcome is ultimately decided by the voters.


BILL:	Bill 6 Constitution Revision Commission
TIME:	01:58:11 PM
MOVED:	Heath
MOTION:	Move to amend Bill 6 to remove section 7 and remove the private funding and use public funds. The motion passed 5-1.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	No
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 5 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	Bill 6 Constitution Revision Commission
TIME:	02:04:15 PM
MOVED:	Heath
MOTION:	Move Bill 6, as amended, to the Legislative Council. The motion passed 4-2.
SECONDED:
		VOTE
	Brophy	No
	Court	Yes
	Gerou	No
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 4 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

Senator Heath said he would be prime sponsor in the Senate and Representative Ferrandino would be the prime sponsor in the House. Those who voted yes on the bill asked to be cosponsors.

02:23 PM -- Bill 1A and 1B

Senator Heath asked the sponsors of Bill 1A and Bill 1B to discuss them together since they both deal with creating a rainy day policy. Senator Brophy explained Bill 1B would create a reserve equal to 15 percent reserve made up of General Fund appropriations. He explained that history shows that a recession occurs every 56 months, or about every five years. He said if there is not an adequate reserve created before the next recession, the legislature will be in the same boat it is now in five years. The difference between Bill 1A and 1B is that in 5 years Bill 1B would have a 15 percent reserve and Bill 1A would only have a 5 percent reserve. Representative Court was asked to explain Bill 1A to the commission. She explained that the bills differentiate in how much the bills generate in how much time. Representative Court said bill 1B would take 4 percent of the General Fund next session and she was unsure where the money would come from. Another difference would be where the money is held.

02:29 PM -- Mr. Gelender, Office of Legislative Legal Services drafter, distributed a handout that compared the two bills (Attachment A). The differences he explained are:

Bill 1A removes the current General Fund reserve and replaces it with a new fund;
Bill 1B keeps the General Fund reserve and makes a separate fund on top of it;
1B begins accruing funds immediately until it reaches 15 percent;
Bill 1A maintains the current schedule for reserves under Senate Bill 09-228 until it maxes out, and then an additional 1 percent is added until 15 percent is reached.

02:33 PM

Mr. Coors asked at what point the General Assembly would be allowed to draw on the reserves in each bill. Senator Brophy explained that 1B requires automatic transfers unless the legislature votes not to make the transfers. Representative Court explained that Bill 1A has the same requirements and triggers, the big difference is how soon the reserve is met. Ms. Neilson expressed her concerns with Bill 1A and the fact that it does not start right away. Senator Morse said he was concerned with the bills because they include formulas. His concern with 1B is that there is already $1.3 billion in cuts that are needed in the budget next year and under Bill 1B, the bill would add to that and then about $1.5 billion in cuts would be required.

Mr. White said he is for Bill 1B and said the legislature should be able to make decisions from year to year. Mr. Fagan supports the bills, and since they are addressing the same issue, he hopes there is a middle point between the two that can be found. He explained that he likes the idea of setting aside money, but the target in Bill 1B is too aggressive and he does not support that. Ms. Lynne said she would support Bill 1B and 1A because the she does not like either of the bills. She would like to find a compromise between the two. Ms. Oliver Cooke said she was a yes on Bill 1B. Mr. Conway supports the bill because it needs to happen and if they do not do it, then it will never happen. Ms. Boigon supports 1A and opposes 1B and believes there needs to be more flexibility than is found in Bill 1B. Mr. Knox said he likes separating the funds but he does not like the immediate impact Bill 1B would have on services. Ms. Neilson said she supports Bill 1B. Mr. Coors supports all rainy day funds and said it just needs to happen.


BILL:	Bill 1B
TIME:	02:43:14 PM
MOVED:	Brophy
MOTION:	Move Bill 1B to Legislative Council. The motion failed 4-2.
SECONDED:
		VOTE
	Brophy	Yes
	Court	No
	Gerou	Yes
	Morse	No
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	No
	Heath	No

Final YES: 2 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	Bill 1A
TIME:	03:30:25 PM
MOVED:	Court
MOTION:	Move Bill 1A to Legislative Council. The motion passed 5-1.
SECONDED:
		VOTE
	Brophy	No
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Final YES: 5 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

Representative Court was designated the House prime sponsor and Senator Heath the prime sponsor in Colorado. The members that voted yes asked to be cosponsors.

03:35 PM

The committee took a brief recess.

03:54 PM -- Bill 2

Representative Gerou explained that Bill 2 would extend the period for transfers for infrastructure spending pursuant to Senate Bill 09-228. Senate Bill 09-228 required a specified percentage of general fund revenues to be transferred to the highway users tax fund and the capital construction fund for a 5-year period beginning in the 2012-13 state fiscal year or a later state fiscal year if a specified trigger is not met. These transfers may be reduced or eliminated depending on the amount of state fiscal year spending constitutionally required to be refunded for the given state fiscal year. Bill 2 extends the original 5-year period for the transfer of moneys from the General Fund to both the highway users tax fund and the capital construction fund an additional 4 years, through the 2020-21 state fiscal year, subject to certain triggers and exceptions.

04:09 PM

Senator Morse explained SB 09-228. Representative Gerou stated that by 2020 there will be about 1.2 million more people in Colorado and stressed the importance of keeping up the infrastructure.


BILL:	Bill 2
TIME:	04:20:31 PM
MOVED:	Gerou
MOTION:	Move Bill 2 to Legislative Council. The motion failed 4-2.
SECONDED:
		VOTE
	Brophy	Yes
	Court	No
	Gerou	Yes
	Morse	No
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	No
	Heath	No

Final YES: 2 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: FAIL

04:35 PM -- Bill 3

Representative Ferrandino asked Mr. Fagan to explain Bill 3. Mr. Fagan explained that the goal of the bill is to increase the number of opportunities nonprofits have to work with state agencies. He explained that the bill uses the current public-private initiative program as an example. The second part provides an incentive for an agency to enter into public-private initiatives by amending an existing statutory definition of "cost savings" in order to allow an agency to retain a portion of any cost savings realized from a personal services contract entered into pursuant to a public-private initiative agreement. Representative Gerou asked about oversight. Mr. Fagan explained that the bill would result in the contract and those issues would be resolved in the contract. Mr. Gelender, Office of Legislative Legal Services, drafter, explained that an agency's functions are defined in statute and they have discretion on how they go about it.


BILL:	Bill 3
TIME:	05:09:53 PM
MOVED:	Ferrandino
MOTION:	Move to amend Bill 3 to remove the safety clause and allow the drafter to make technical changes and have the bill start in the House with Representative Ferrandino and Senator Morse in the Senate as prime sponsors. The motion passed 6-0.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Not Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	Bill 3
TIME:	05:13:09 PM
MOVED:
MOTION:	Move Bill 3 to Legislative Council, as amended. The motion passed 6-0.
SECONDED:
		VOTE
	Brophy	Yes
	Court	Yes
	Gerou	Yes
	Morse	Yes
	Boigon
	Conway
	Cooke
	Coors
	Fagan
	Hume
	Knox
	Lynne
	Neilson
	White
	Ferrandino	Yes
	Heath	Yes

Final YES: 6 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

05:20 PM

The commission adjourned.