Senate Bill 25b-001 Revised

A Bill for an Act

• Page 1, Line 101Concerning the processes for the governor to reduce

• Page 1, Line 102spending when the state is unable to meet its fiscal

• Page 1, Line 103obligations, and, in connection therewith, requiring

• Page 1, Line 104the governor to present spending reduction plans to

• Page 1, Line 105the joint budget committee and receive advice from the

• Page 1, Line 106joint budget committee.

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.)

Under existing law, the governor is permitted to, by executive order, suspend or discontinue the functions or services of state government (discretionary spending reductions) when there are not sufficient revenues available to carry on the functions of the state government.

The bill relocates the provisions of law allowing the governor to make discretionary spending reductions and requires the governor to promptly notify the joint budget committee (JBC) of the executive order. As soon as practicable after receiving the notification, the JBC shall hold a meeting to discuss the governor's plans for discretionary spending reductions. At the meeting, the governor or the office of state planning and budgeting (OSPB), or both, shall present the executive order to the JBC and the JBC may provide advice regarding discretionary spending reductions.

Under existing law, the governor is required to formulate and implement a plan to reduce general fund expenditures when the governor's regular quarterly revenue estimate indicates that appropriations from the general fund then in effect will result in either using more than one-half of the required amount of general fund reserve (reserve) or the balance of the reserve dropping to below $1 billion (required spending reductions).

In addition to the regular quarterly revenue estimate trigger, the bill adds as a required spending reduction trigger for the governor that an updated regular quarterly revenue estimate indicates that the state needs to use an amount of the reserve equal to the lesser of 2% of general fund appropriations for the fiscal year or one-half of the required reserve, or when the balance of the reserve drops to below $1 billion.

Under existing law, the governor promptly notifies the general assembly of a required spending reduction plan. The bill requires the JBC to hold a meeting as soon as practicable after receiving the notification. At the meeting, the governor or OSPB, or both, shall present the plan to the JBC and the JBC may provide advice regarding the plan.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, amend with relocated provisions 24-75-201.5 as follows:

• Page 2, Line 324-75-201.5.  Revenue shortfalls - authority of the governor -

• Page 2, Line 4when governor is required to act - definition. (1) [Formerly 24-2-102

• Page 2, Line 5(4)]  (a)  If, during any fiscal period year, the governor determines

• Page 2, Line 6that there are not, or will not be, sufficient revenues available for

• Page 3, Line 1expenditure during such period the fiscal year to carry on the functions

• Page 3, Line 2of the state government and to support its agencies and institutions, and

• Page 3, Line 3such fact is made to appear to the governor the governor may, in the

• Page 3, Line 4exercise of his the governor's discretion, by executive order, he may

• Page 3, Line 5suspend or discontinue, in whole or in part, the functions or services of

• Page 3, Line 6any department, board, bureau, or agency of the state government; except

• Page 3, Line 7that the authority of the governor to restrict the expenditure of moneys

• Page 3, Line 8money appropriated from the capital construction fund shall must be

• Page 3, Line 9determined by the provisions of section 24-75-201.5 in accordance with the requirements in subsection (4) of this section.

• Page 3, Line 10(b) (I)  The governor shall promptly notify the joint

• Page 3, Line 11budget committee of an executive order issued by the governor

• Page 3, Line 12pursuant to this subsection (1), including an executive order

• Page 3, Line 13issued pursuant to subsection (1)(c) of this section that extends

• Page 3, Line 14the operation of a prior executive order. As soon as practicable

• Page 3, Line 15after receiving the notification, and except as provided in

• Page 3, Line 16subsection (1)(b)(II) of this section, the joint budget committee

• Page 3, Line 17shall hold a meeting to discuss the governor's plans for

• Page 3, Line 18suspending or discontinuing any functions or services of any

• Page 3, Line 19department, board, bureau, or agency of the state government

• Page 3, Line 20pursuant to this subsection (1). The joint budget committee shall

• Page 3, Line 21make all reasonable efforts to hold the meeting before the first

• Page 3, Line 22day of the calendar month following the entry of the executive

• Page 3, Line 23order. At the joint budget committee's meeting, the governor or

• Page 3, Line 24the office of state planning and budgeting, or both, shall

• Page 3, Line 25present the executive order to the committee, and the committee

• Page 3, Line 26may provide advice at the meeting regarding the suspension or discontinuation of any functions or services.

• Page 4, Line 1(II)  The joint budget committee is not required to hold a

• Page 4, Line 2meeting described in subsection (1)(b)(I) of this section if the

• Page 4, Line 3executive order issued pursuant to this subsection (1) is to

• Page 4, Line 4implement a plan described in subsection (2) of this section and

• Page 4, Line 5the joint budget committee held a meeting in accordance with

• Page 4, Line 6subsection (2)(b) of this section. This subsection (1)(b)(II) does

• Page 4, Line 7not prohibit the joint budget committee from holding a meeting

• Page 4, Line 8and requesting the governor or the office of state planning and budgeting, or both, to attend the meeting.

• Page 4, Line 9(c)  Such A discontinuance or suspension shall become made

• Page 4, Line 10pursuant to this subsection (1) becomes effective upon the first day

• Page 4, Line 11of the calendar month following the entry of such the executive order

• Page 4, Line 12and shall may continue for such a period of time, not to exceed three

• Page 4, Line 13months, as shall be determined by such set forth in the executive order.

• Page 4, Line 14If, during any such the period of time, it again appears to the governor

• Page 4, Line 15determines that such the deficiency of revenues still persists, from time

• Page 4, Line 16to time, he the governor may extend the operation of such the

• Page 4, Line 17executive order for a like period of time not to exceed three months; but months.

• Page 4, Line 18(d)  The state shall not be is not liable for the payment of any

• Page 4, Line 19claim for salaries or expenses subject to a suspension or

• Page 4, Line 20discontinuation pursuant to this subsection (1) purporting to have

• Page 4, Line 21accrued against any such department, board, bureau, or agency during any

• Page 4, Line 22such period of the suspension or discontinuation, and the controller

• Page 4, Line 23shall not issue nor may and the state treasurer shall not honor any

• Page 4, Line 24warrant therefor. Elective officers shall not be subject to the provisions

• Page 5, Line 1of this article, parts 2 and 11 of article 30, and articles 31, 35, 36, and 101 to 111 of this title.

• Page 5, Line 2(1)  (2) (a)  Whenever the revenue estimate for the current fiscal

• Page 5, Line 3year prepared by the governor in accordance with section 24-75-201.3

• Page 5, Line 4(2), or an interim revenue estimate prepared by the governor,

• Page 5, Line 5indicates that general fund expenditures for such that fiscal year based

• Page 5, Line 6on appropriations then in effect will result in the use of using an

• Page 5, Line 7amount of the reserve described in section 24-75-201.1 (1)(d) that

• Page 5, Line 8is equal to the lesser of three percent of general fund

• Page 5, Line 9appropriations for the fiscal year or one-half or more of the reserve

• Page 5, Line 10required by section 24-75-201.1 (1)(d), the governor shall formulate a

• Page 5, Line 11plan for reducing such general fund expenditures so that said the reserve,

• Page 5, Line 12as of the close of the fiscal year, will be at least below the amount

• Page 5, Line 13required in section 24-75-201.1 (1)(d) by no more than an amount

• Page 5, Line 14equal to three percent of general fund appropriations for the

• Page 5, Line 15fiscal year or one-half or more of the amount required by said section

• Page 5, Line 1624-75-201.1 (1)(d), as applicable. If the governor is implementing

• Page 5, Line 17a plan pursuant to subsection (2)(d) of this section, the governor

• Page 5, Line 18is not required to formulate and implement a plan pursuant to this subsection (2)(a).

• Page 5, Line 19(b)  The governor shall promptly notify the general assembly of the

• Page 5, Line 20a plan created by the governor pursuant to this subsection (2).

• Page 5, Line 21The joint budget committee shall hold a meeting as soon as

• Page 5, Line 22practicable after the general assembly is notified of the plan.

• Page 5, Line 23At the joint budget committee's meeting, the governor or the

• Page 5, Line 24office of state planning and budgeting, or both, shall present

• Page 5, Line 25the plan to the committee, and the committee may provide advice at the meeting regarding the plan.

• Page 6, Line 1(c)  The governor shall promptly implement a plan shall be

• Page 6, Line 2promptly implemented by the governor, created by the governor

• Page 6, Line 3pursuant to this subsection (2) using the procedures set forth in

• Page 6, Line 4section 24-2-102 (4) subsection (1) of this section or section 24-50-109.5 or any other lawful means.

• Page 6, Line 5(b) to (g)  Repealed.

• Page 6, Line 6(h)  (d)  Whenever the revenue estimate for the current fiscal year,

• Page 6, Line 7prepared by the governor in accordance with section 24-75-201.3 (2),

• Page 6, Line 8or an interim revenue estimate prepared by the governor,

• Page 6, Line 9indicates that general fund expenditures for that fiscal year based on

• Page 6, Line 10appropriations then in effect will result in the use of an amount of the

• Page 6, Line 11reserve required by section 24-75-201.1 (1)(d) that would result in that

• Page 6, Line 12reserve equaling less than one billion dollars, the governor shall formulate

• Page 6, Line 13a plan for reducing such general fund expenditures so that said the

• Page 6, Line 14reserve, as of the close of the fiscal year, will be at least one billion

• Page 6, Line 15dollars. The governor shall promptly notify the general assembly of the

• Page 6, Line 16plan and promptly implement the plan in accordance with section

• Page 6, Line 1724-2-102 (4) or 24-50-109.5 or any other lawful means. The procedures

• Page 6, Line 18and requirements in subsections (2)(b) and (2)(c) of this section

• Page 6, Line 19apply to a plan formulated pursuant to this subsection (2)(d). If

• Page 6, Line 20the governor is implementing a plan pursuant to subsection (2)(a)

• Page 6, Line 21of this section, the governor is not required to formulate and implement a plan pursuant to this subsection (2)(d).

• Page 6, Line 22(e)  As used in this subsection (2), "interim revenue estimate

• Page 6, Line 23prepared by the governor" means an updated revenue estimate

• Page 6, Line 24in the time between two estimates made by the governor

• Page 7, Line 1pursuant to section 24-75-201.3 (2), which interim estimate is

• Page 7, Line 2prepared by the governor, designated by the governor as an

• Page 7, Line 3interim revenue estimate that is an update to the most recent

• Page 7, Line 4prior revenue estimate, transmitted to the general assembly,

• Page 7, Line 5and presented at a meeting of the joint budget committee as an

• Page 7, Line 6interim revenue estimate that is an update to the most recent prior revenue estimate.

• Page 7, Line 7(2)  (3)  In formulating a plan for the reduction of general fund

• Page 7, Line 8expenditures as required by subsection (1) subsection (2) of this section,

• Page 7, Line 9the governor may consider any recommendations for reducing general

• Page 7, Line 10fund expenditures of the institutions of higher education submitted by the

• Page 7, Line 11Colorado commission on higher education, after consultation with the governing boards of such the institutions.

• Page 7, Line 12(3)  Repealed.

• Page 7, Line 13(4)  Whenever the governor has formulated and implemented a

• Page 7, Line 14plan to reduce general fund expenditures in accordance with subsection

• Page 7, Line 15(1) subsection (2) of this section, and such the plan reduces general

• Page 7, Line 16fund expenditures in an amount equal to or greater than one percent of all

• Page 7, Line 17general fund appropriations for the fiscal year, the governor, after

• Page 7, Line 18consultation with the capital development committee and the joint budget

• Page 7, Line 19committee, may transfer general fund moneys money from the capital

• Page 7, Line 20construction fund into the general fund. Pursuant to this subsection (4),

• Page 7, Line 21the governor will may only restrict the capital construction projects in

• Page 7, Line 22the reverse order of the priorities as established by the capital

• Page 7, Line 23development committee unless approved by the capital development committee and the joint budget committee.

• Page 7, Line 24(5)  Notwithstanding the authority in this section to

• Page 8, Line 1formulate and implement a plan to reduce general fund

• Page 8, Line 2expenditures, the governor shall not reduce general fund

• Page 8, Line 3expenditures by the judicial department, the legislative

• Page 8, Line 4department, or elective officers other than the governor pursuant to this section.

• Page 8, Line 5SECTION 2.  In Colorado Revised Statutes, 24-2-102, repeal (4); and add (5) as follows:

• Page 8, Line 624-2-102.  Appointment of officers and employees. (4)  If,

• Page 8, Line 7during any fiscal period, there are not sufficient revenues available for

• Page 8, Line 8expenditure during such period to carry on the functions of the state

• Page 8, Line 9government and to support its agencies and institutions and such fact is

• Page 8, Line 10made to appear to the governor, in the exercise of his discretion, by

• Page 8, Line 11executive order, he may suspend or discontinue, in whole or in part, the

• Page 8, Line 12functions or services of any department, board, bureau, or agency of the

• Page 8, Line 13state government; except that the authority of the governor to restrict the

• Page 8, Line 14expenditure of moneys appropriated from the capital construction fund

• Page 8, Line 15shall be determined by the provisions of section 24-75-201.5. Such

• Page 8, Line 16discontinuance or suspension shall become effective upon the first day of

• Page 8, Line 17the calendar month following the entry of such executive order and shall

• Page 8, Line 18continue for such period of time, not to exceed three months, as shall be

• Page 8, Line 19determined by such executive order. If, during any such period of time,

• Page 8, Line 20it again appears to the governor that such deficiency of revenues still

• Page 8, Line 21persists, from time to time, he may extend the operation of such executive

• Page 8, Line 22order for a like period of time not to exceed three months; but the state

• Page 8, Line 23shall not be liable for the payment of any claim for salaries or expenses

• Page 8, Line 24purporting to have accrued against any such department, board, bureau,

• Page 8, Line 25or agency during any such period of suspension, and the controller shall

• Page 9, Line 1not issue nor may the state treasurer honor any warrant therefor. Elective

• Page 9, Line 2officers shall not be subject to the provisions of this article, parts 2 and 11 of article 30, and articles 31, 35, 36, and 101 to 111 of this title.

• Page 9, Line 3(5)  Elective officers shall not be subject to the provisions

• Page 9, Line 4of this article 2, parts 2 and 11 of article 30, and articles 31, 35, 36, and 101 to 111 of this title 24.

• Page 9, Line 5SECTION 3.  In Colorado Revised Statutes, 24-30-1404, amend (7)(e) as follows:

• Page 9, Line 624-30-1404.  Contracts - definition. (7) (e)  In the event that the

• Page 9, Line 7governor restricts or delays the expenditure of money for a project for

• Page 9, Line 8which a professional services contract is required pursuant to the

• Page 9, Line 9authority granted to the governor in section 24-75-201.5 section

• Page 9, Line 1024-75-201.5 (2), the deadlines imposed in subsection (7)(a) of this section

• Page 9, Line 11for such the projects shall be are tolled until such time as the restriction

• Page 9, Line 12or delay is no longer in effect, at which time the professional services

• Page 9, Line 13contract must be executed and encumbered and any contract with the contractor must be entered into within six months.

• Page 9, Line 14SECTION 4.  Applicability. This act applies to revenue estimates

• Page 9, Line 15and interim revenue estimates presented, and executive orders issued, on or after the effective date of this act.

• Page 9, Line 16SECTION 5.  Safety clause. The general assembly finds,

• Page 9, Line 17determines, and declares that this act is necessary for the immediate

• Page 9, Line 18preservation of the public peace, health, or safety or for appropriations for

• Page 9, Line 19the support and maintenance of the departments of the state and state institutions.