24-75-402. Cash funds - limit on uncommitted reserves - reduction in amount of fees - exclusions.

(1) The general assembly hereby finds that:

(a) Section 20 of article X of the state constitution limits state fiscal year spending;

(b) Subject to certain exclusions specified in section 20 of article X of the state constitution, all state general fund revenues and all state cash fund revenues are subject to the limitation on state fiscal year spending;

(c) The legislative powers of the general assembly, including but not limited to its plenary power of appropriation, authorize and require the general assembly to assure compliance with the limitation on state fiscal year spending and to make fundamental fiscal policy decisions establishing the level of activity of all departments and agencies of state government, including those funded by revenues generated from fees;

(d) Consonant with the exercise of such legislative powers, the general assembly must establish limits on the amount of uncommitted reserves that may be maintained by state agencies for cash funds and exercise any other necessary controls on cash fund revenues, including but not limited to the power of appropriation;

(e) In order to ensure compliance with the limitations on the amount of uncommitted reserves that may be maintained for any cash fund, the general assembly may require reductions in the amount of fees collected by state agencies, even though such reductions may result in some persons paying more than other persons to receive state agency services.

(2) For purposes of this section, unless the context otherwise requires:

(a) "Alternative reserve balance" means a minimum reserve balance that exceeds the target reserve, a maximum reserve balance that is less than the target reserve, or a maximum reserve balance that exceeds the target reserve.

(b) "Cash fund" means any fund, other than the state general fund created by section 24-75-201 and any federal fund, established by law for a specific program or purpose.

(c) (I) "Entity" means any organ of the legislative, executive, or judicial branch of the government of the state of Colorado, including but not limited to:

(A) The departments of the executive branch;

(B) The legislative houses and agencies;

(C) The appellate and trial courts and court personnel; and

(D) State institutions of higher education.

(II) "Entity" does not include any enterprise, as defined in section 24-77-102 (3), or any special purpose authority.

(d) "Excess uncommitted reserves" means the amount of uncommitted reserves for a cash fund that exceeds the target reserve amount for that cash fund.

(e) "Fees" means any moneys collected by an entity; except that "fees" does not include:

(I) Any moneys collected from sources excluded from state fiscal year spending, as defined in section 24-77-102 (17);

(II) Any moneys received through the imposition of penalties or fines or surcharges imposed on any person convicted of a crime;

(III) Any moneys appropriated from the state general fund;

(IV) Any moneys received through the imposition of taxes;

(V) Any moneys received from charges or assessments, the amount of which are not determined by the entity;

(VI) Any moneys received from gifts or donations;

(VII) Any moneys received from local government grants or contracts;

(VIII) Any moneys received through direct transfers from another entity, an enterprise, or a special purpose authority;

(IX) Any moneys received as interest or other investment income.

(f) "Nonmonetary current asset" means an asset that either cannot be converted to cash or is held with the intent of being used rather than being converted to cash.

(g) "Target reserve" means sixteen and five-tenths percent of the amount expended from a cash fund during the fiscal year.

(h) "Uncommitted reserves" means the fund balance of a cash fund as of June 30 of any fiscal year, minus the following:

(I) Any long-term assets credited to the cash fund;

(II) Any unencumbered fund balance previously appropriated for capital construction or other multiyear purposes;

(III) Any nonmonetary current assets credited to the cash fund, including but not limited to consumable inventory and prepaid expenses;

(IV) Any portion of the revenues credited to the cash fund that is estimated to be derived from non-fee sources. The estimate shall be equal to the portion of total revenues received from non-fee sources in the prior fiscal year.

(3) (a) At the end of the 1997-98 fiscal year, if the uncommitted reserves of a cash fund exceed the target reserve, each entity that collects one or more of the fees deposited in the cash fund shall by rule or as otherwise provided by law reduce the amount of said fees as follows:

(I) If the uncommitted reserves exceed sixteen and five-tenths percent of the amount expended from the cash fund during the 1997-98 fiscal year but are less than fifty percent of the amount expended from the cash fund during the 1997-98 fiscal year, the fees shall be reduced by an amount calculated to result in an amount of uncommitted reserves by the end of the 2000-01 fiscal year that does not exceed the target reserve for the 2000-01 fiscal year;

(II) If the uncommitted reserves equal fifty percent or more of the amount expended from the cash fund during the 1997-98 fiscal year, the fees shall be reduced by an amount calculated to result in an amount of uncommitted reserves by the end of the 2002-03 fiscal year that does not exceed the target reserve for the 2002-03 fiscal year.

(b) Notwithstanding any provisions of this subsection (3) to the contrary, the provisions of paragraph (a) of this subsection (3) shall not apply to any cash fund for which an alternative reserve balance is specified in the constitution or for which an alternative reserve balance is otherwise established by law. If the actual amount of uncommitted reserves exceeds the alternative reserve balance otherwise specified for any cash fund, each entity that collects one or more of the fees deposited in the cash fund shall by rule or as otherwise provided by law reduce the amount of said fees. The amount of fee reduction shall be calculated to reduce the uncommitted reserves to not more than the alternative reserve balance otherwise specified for the cash fund by the end of the 2000-01 fiscal year.

(c) For the 2002-03 fiscal year and for each fiscal year thereafter, the uncommitted reserves of any cash fund at the conclusion of any given fiscal year shall not exceed the target reserve for that fiscal year; except that, for any cash fund for which an alternative reserve balance is otherwise specified in the constitution or by law, the uncommitted reserves of said cash fund shall not exceed the alternative reserve balance otherwise specified. If the amount of uncommitted reserves of any cash fund at the conclusion of any given fiscal year exceeds the target reserve or an alternative reserve balance otherwise specified for the cash fund in the constitution or by law, each entity that collects one or more of the fees deposited in the cash fund shall by rule or as otherwise provided by law reduce the amount of one or more of said fees to an amount calculated to result in an amount of uncommitted reserves of the cash fund for the current fiscal year that does not exceed the target reserve or the alternative reserve balance otherwise specified for the cash fund in the constitution or by law.

(d) If more than one entity collects the fees that are deposited in a cash fund and the amount of said fees are required to be reduced pursuant to this subsection (3), the reduction in fees for each entity shall be proportional to the amount of fees contributed by each entity to the excess uncommitted reserves.

(e) In calculating the reduction in fees under this subsection (3), an entity may take into account increases in expenditures from the cash fund.

(4) (a) If an entity reduces the amount of a fee pursuant to subsection (3) of this section, the entity by rule or as otherwise provided by law may subsequently raise the amount of the fee so long as the projected amount of uncommitted reserves of the cash fund does not exceed the limitations specified in subsection (3) of this section. Any such fee increase by an entity in the executive branch, prior to promulgation or adoption, shall be subject to approval by the office of state planning and budgeting. The entity shall not increase the fee beyond any amount specified in statute for the fee.

(b) Any rule adopted by an entity in the executive branch that reduces the amount of a fee pursuant to subsection (3) of this section or increases the amount of a fee pursuant to this subsection (4) shall be subject to the requirements of the "State Administrative Procedure Act", article 4 of this title.

(5) Notwithstanding any provision of this section to the contrary, the following cash funds are excluded from the limitations specified in this section:

(a) Any cash fund for which revenues are derived solely from fees, the amounts of which are established by the federal government;

(b) Any cash fund for which revenues are derived solely from fees set by the Colorado supreme court in the exercise of its exclusive authority to regulate the practice of law;

(c) Any cash fund for which revenues are derived solely from fees set by an enterprise, as defined in section 24-77-102 (3), or a special purpose authority;

(d) Any cash fund that is established to fund capital construction;

(e) Any cash fund for which the reserve amounts are based on actuarial requirements;

(f) Any trust fund;

(g) Any cash fund with uncommitted reserves of less than fifty thousand dollars;

(h) The highway users tax fund and the state highway fund; except that the emergency medical services account created in section 25-3.5-603, C.R.S., the Colorado state titling and registration account created in section 42-1-211 (2), C.R.S., and the AIR account created in section 42-3-304 (18) (a), C.R.S., included in the highway users tax fund shall be subject to the provisions of this section;

(i) The petroleum storage tank fund created in section 8-20.5-103, C.R.S.;

(j) The hazardous substance response fund created in section 25-16-104.6, C.R.S.;

(k) The land and water management fund created in section 36-1-148, C.R.S.;

(l) The brand inspection fund created in section 35-41-102, C.R.S.;

(m) The Colorado state fair authority cash fund created in section 35-65-107, C.R.S.;

(n) The motorcycle operator safety training fund created in section 43-5-504, C.R.S.;

(o) The cost containment fund created in section 8-14.5-108, C.R.S.;

(p) The workers' compensation cash fund created in section 8-44-112 (7), C.R.S.;

(q) Repealed.

(r) The state commission on judicial performance cash fund created in section 13-5.5-107, C.R.S.;

(s) The Colorado disabled telephone users fund created in section 40-17-104, C.R.S.;

(t) The Colorado bureau of investigation identification unit fund created in section 24-33.5-426;

(u) The department of human services buildings and grounds cash fund created in section 26-1-133.5 (2), C.R.S.;

(v) The judicial department information technology cash fund created in section 13-32-114, C.R.S.;

(w) The private activity bond allocations fund created in section 24-32-1709.5 (2);

(x) The Colorado high cost administration fund created in section 40-15-208 (3), C.R.S.;

(y) The public school construction and inspection cash fund created in section 24-33.5-1207.7.

Editor's note: This paragraph (y) is effective January 1, 2010.

(6) Notwithstanding any provision of this section to the contrary, the limitations specified in this section shall not apply to any cash fund used to fund a single program if the program has been in existence less than two full fiscal years.

(7) The office of state planning and budgeting shall annually review the total amount of revenues credited to cash funds, including but not limited to the amounts received from fees and from other sources, and the report of uncommitted reserves prepared by the state controller pursuant to section 24-30-207 (3).

(8) (a) Notwithstanding the target reserve limitation imposed pursuant to paragraph (c) of subsection (3) of this section, for fiscal years beginning on or after July 1, 2000, the general assembly may grant a waiver of the target reserve requirement specified in subsection (3) of this section for an entity that demonstrates a specific purpose for which the entity needs to maintain uncommitted reserves in an amount greater than the target reserve for a specified, limited period of time. A specific purpose that may warrant a waiver pursuant to this subsection (8) includes, but is not limited to, purchase of a particular item of equipment or operation of a short-term program.

(b) To request a waiver pursuant to this subsection (8), an entity, during the annual budget-setting process, shall present a plan to the joint budget committee that at a minimum specifies the specific purpose for which the entity needs to maintain a greater amount of uncommitted reserves, the greater amount of uncommitted reserves requested, the time period for the waiver, and the plan for reducing any excess uncommitted reserves that may remain on completion of the waiver period. The joint budget committee, in determining whether to recommend a waiver pursuant to this subsection (8), shall consider the purpose for which the entity has requested the waiver, the reasonableness of the time period for the waiver, and the effect the waiver may have on the state's ability to comply with the limitations on state fiscal year spending imposed pursuant to section 20 of article X of the state constitution.

(c) The joint budget committee shall recommend legislation to grant any waiver requested pursuant to this subsection (8) that the committee deems appropriate. The legislation, at a minimum, shall specify the fund for which the waiver is granted, the greater amount of uncommitted reserves authorized, and the time period for the waiver.

(9) For the fiscal year commencing on July 1, 2000, and ending June 30, 2001, a waiver of the target reserve requirement specified in subsection (3) of this section shall be allowed pursuant to paragraph (a) of subsection (8) of this section for the following:

(a) The educator licensure cash fund created in section 22-60.5-112, C.R.S., shall be allowed to retain an amount equal to two hundred thirty-eight thousand seven hundred twenty-four dollars in excess uncommitted reserves;

(b) The supplier database cash fund created in section 24-102-202.5 (2) shall be allowed to retain an amount equal to two hundred eighty-nine thousand three hundred twenty-two dollars in excess uncommitted reserves;

(c) The emergency services medical services account of the highway users tax fund created in section 25-3.5-603 (1), C.R.S., shall be allowed to retain an amount equal to three hundred ninety-six thousand seven hundred fifty dollars in excess uncommitted reserves;

(d) The wildlife cash fund created in section 33-1-112 (1), C.R.S., shall be allowed to retain an amount equal to two million six hundred twenty thousand four hundred eighty-eight dollars in excess uncommitted reserves; and

(e) The historical society enterprise services fund shall be allowed to retain an amount equal to fifty-five thousand nine hundred sixty-six dollars in excess uncommitted reserves.

(10) For the fiscal year commencing July 1, 2008, and each fiscal year thereafter, the public safety inspection fund created in section 8-1-151, C.R.S., shall not be subject to the limit on uncommitted reserve funds pursuant to this section.

Source: L. 98: Entire section added, p. 1311, § 1, effective June 1. L. 2001: (8)(a) amended and (9) added, p. 764, § 1, effective June 1. L. 2002: (5)(n) added, p. 225, § 1, effective April 5; (5)(o) and (5)(p) added, p. 551, § 1, effective May 24. L. 2003: (5)(q) added, p. 1975, § 2, effective May 22; (5)(r) added, p. 2672, § 4, effective June 6. L. 2005: (5)(h) amended, p. 771, § 46, effective June 1; (5)(h) amended, p. 1183, § 32, effective August 8. L. 2006: (5)(s) added, p. 1170, § 2, effective May 25. L. 2008: (10) added, p. 1022, § 4, effective May 21; (5)(u) added, p. 1345, § 4, effective May 27; (5)(v) added, p. 1239, § 2, effective May 27; (5)(t) added, p. 81, § 2, effective August 5; (10) added, p. 1095, § 5, effective August 5. L. 2009: (5)(w) added, (SB 09-041), ch. 56, p. 201, § 6, effective March 25; (5)(x) added, (SB 09-272), ch. 209, p. 950, § 2, effective May 1; (5)(y) added, (HB 09-1151), ch. 230, p. 1059, § 12, effective January 1, 2010.

Editor's note: (1) Subsection (5)(r) was originally lettered as (5)(q) in House Bill 03-1378 but has been relettered on revision for ease of location.

(2) Amendments to subsection (5)(h) by House Bill 05-1337 and House Bill 05-1107 were harmonized.

(3) Subsection (5)(q)(II) provided for the repeal of subsection (5)(q), effective July 1, 2006. (See L. 2003, p. 1975.)

(4) Subsection (5)(y) was added in a 2009 act that was passed without a safety clause. The act establishes an effective date of January 1, 2010, for this provision. The act, or portions thereof, may not take effect if the people exercise their right to petition under article V, section 1 (3) of the state constitution. For further explanation concerning the effective date, see page ix of this volume.

(5) Subsection (5)(y) was originally lettered as (5)(x) in House Bill 09-1151 but has been relettered on revision for ease of location.