A Bill for an Act
Page 1, Line 101Concerning a requirement that state agencies implement
Page 1, Line 102zero-based budgeting.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
In state fiscal year 2026-27, the bill requires the department of revenue, the department of education, and the department of transportation to implement a budgeting method in which all expenses, both existing and new, must be justified for the fiscal year and every function is analyzed for its needs and costs (zero-based budgeting) when submitting a budget request. In state fiscal year 2027-28 and each state fiscal year thereafter, the bill requires all state agencies in all principal departments to implement zero-based budgeting when submitting a budget request.
In state fiscal year 2026-27 and each state fiscal year thereafter, the office of state planning and budgeting is required to develop and digitally distribute to state agencies information related to zero-based budgeting training and to provide virtual sessions for the purpose of training state agencies to implement zero-based budgeting. In state fiscal year 2027-28 and each state fiscal year thereafter, the office of state planning and budgeting is required to submit to the general assembly an annual report detailing the effectiveness of zero-based budgeting.
All budget requests that implement zero-based budgeting must be publicly accessible on the general assembly's website, and the state auditor is required to conduct periodic financial audits to ensure state agencies' compliance with zero-based budgeting requirements.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, 2-3-208, amend (6); and add (1)(c) and (2.5) as follows:
Page 2, Line 32-3-208. Budget requests - amendments - supplemental
Page 2, Line 4appropriation requests - deadlines - definitions. (1) As used in this section, unless the context otherwise requires:
Page 2, Line 5(c) "Zero-based budgeting" means a budgeting method in
Page 2, Line 6which all expenses, both existing and new, must be justified for
Page 2, Line 7the fiscal year and every function is analyzed for its needs and costs.
Page 2, Line 8(2.5) (a) In state fiscal year 2026-27, when submitting a
Page 2, Line 9budget request to the joint budget committee pursuant to
Page 2, Line 10subsection (2)(a) of this section, the following state agencies
Page 2, Line 11shall, without further appropriations for the purposes of this subsection (2.5)(a), implement zero-based budgeting:
Page 2, Line 12(I) The department of revenue;
Page 2, Line 13(II) The department of education; and
(III) The department of transportation.
Page 3, Line 1(b) In state fiscal year 2027-28 and each state fiscal year
Page 3, Line 2thereafter, when submitting a budget request to the joint
Page 3, Line 3budget committee pursuant to subsection (2)(a) of this section,
Page 3, Line 4all state agencies in all principal departments shall, without
Page 3, Line 5further appropriations for the purposes of this subsection(2.5)(b), implement zero-based budgeting.
Page 3, Line 6(c) In state fiscal year 2026-27 and each state fiscal year
Page 3, Line 7thereafter, the office of state planning and budgeting shall,
Page 3, Line 8without any further appropriations for the purposes of this subsection (2.5)(c):
Page 3, Line 9(I) Develop and digitally distribute to state agencies information related to zero-based budgeting training; and
Page 3, Line 10(II) Provide virtual sessions for the purpose of training state agencies to implement zero-based budgeting.
Page 3, Line 11(d) In state fiscal year 2027-28 and each state fiscal year
Page 3, Line 12thereafter, the office of state planning and budgeting shall,
Page 3, Line 13without any further appropriations for the purposes of this
Page 3, Line 14subsection (2.5)(d), submit to the joint budget committee a report
Page 3, Line 15concerning the effectiveness of zero-based budgeting
Page 3, Line 16implemented pursuant to subsections (2.5)(a) and (2.5)(b) of this section.
Page 3, Line 17(e) In state fiscal year 2026-27 and each state fiscal year
Page 3, Line 18thereafter, without any further appropriations for the purposes
Page 3, Line 19of this subsection (2.5)(e), all budget requests that implement
Page 3, Line 20zero-based budgeting pursuant to subsections (2.5)(a) and (2.5)(b)
Page 3, Line 21of this section must be publicly accessible on the general assembly's website.
Page 4, Line 1(f) The state auditor shall, without any further
Page 4, Line 2appropriations for the purposes of this subsection (2.5)(f),
Page 4, Line 3conduct or cause to be conducted an audit of each state agency
Page 4, Line 4to ensure state agencies' compliance with the zero-based
Page 4, Line 5budgeting requirements described in subsections (2.5)(a) and (2.5)(b) of this section.
Page 4, Line 6(6) For purposes of this section, except for subsection (2.5) of
Page 4, Line 7this section, the office of administrative services for independent
Page 4, Line 8agencies in the judicial department, created in section 13-100-103, is a
Page 4, Line 9state agency. Included agencies, as defined in section 13-100-102, are not state agencies for purposes of budget request submissions.
Page 4, Line 10SECTION 2. Act subject to petition - effective date. This act
Page 4, Line 11takes effect at 12:01 a.m. on the day following the expiration of the
Page 4, Line 12ninety-day period after final adjournment of the general assembly; except
Page 4, Line 13that, if a referendum petition is filed pursuant to section 1 (3) of article V
Page 4, Line 14of the state constitution against this act or an item, section, or part of this
Page 4, Line 15act within such period, then the act, item, section, or part will not take
Page 4, Line 16effect unless approved by the people at the general election to be held in
Page 4, Line 17November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.