May 6, 2026 · Appropriations · 14,673 words · 14 speakers · 401 segments
. Thank you. Thank you. Thank you. Thank you.
Appropriations will come to order. Mr. Catlett, please call the roll.
Senators Gonzalez. Present.
Kirkmeyer. Here.
Colker. Here.
Liston. Here.
Pelton. Present.
Mr. Vice Chair. Yep.
Madam Chair. Here. Okay, so our first bill this morning is Senate Bill 178, and I see our bill sponsors are here, and I also sense some swirling something or other happening around me Yeah So I will ask Mr Vice Chair to move the bill and just to make sure bill sponsors would like L10 also to be moved. Can you turn on your mic, please?
Oh, sorry. I don't have a reprint. Here we go.
Madam Chair.
I don't have L10. I have 11 and 12. Yeah, we just were handed out. 10, we already have. It was a multi-page, so it got handed out yesterday, I think. I don't have the full updated packet. I just have, oh, this is. It's not at the beginning, though. Is it at the end? It's, no, it's not. 125 is worst. Okay. All right. Great. Nothing for you. All right.
L10.
Yes.
Senator Mullica. Thank you, Madam Chair. Yes, we would like L10 offered, if possible, by the committee, please.
Okay. And no other amendments at this time. Not from the sponsors. So, Mr. Vice Chair.
Thank you, Madam Chair. As is my duty, I move Senate Bill 178 and L10.
Okay. I think given the length of this amendment and that many of the members are just receiving that now, bill sponsors, would you like to describe for us Senator Mullica?
Thank you, Madam Chair. L10 should have been passed out to everyone yesterday with the 24-hour rule, and so we made sure that it was out yesterday morning at, I think, 744, if I remember correctly. Essentially what this amendment does is we received significant feedback from some of our colleagues and then specifically some members of this committee that with the original bill utilizing UPTF dollars as a loan, that that was not something that people wanted to see. And so we made those changes, but this amendment specifically takes the $40 million piece that was going to be paid by the plans and instead takes that from them. They're on a tax cash fund reserve. And in lieu of that $40 million being taken from the reserve, a state building is placed in lieu of those dollars so that there is still an asset in there in the reserves. And so that's what this amendment does.
Okay, and I just, is it a loan or is it just you're taking it from the reserves and it's not to be paid back?
It's just a one-time transfer. One-time transfer.
Okay, committee members, are there any other questions about L10?
Seeing Senator Gonzalez. Thank you, Madam Chair. Senator Mullica, can you help us understand with whom you have stakeholder, with whom you've chatted about, about the importance of this amendment and this mechanism?
Senator Mullica. Thank you Madam Chair There been a number of folks that we talked about from the plans to advocates to to the governor office in regards to doing this Members of this committee have made sure that their viewpoints were were communicated to us as well. And so so that's that's the reason we went this route. And there's also, you know, I think, you know, we heard a lot in testimony in the Finance Committee as well, and just trying to address some of the concerns that we heard during that process.
Senator Cloaker. Thank you, Madam Chair. Also, question regarding the amendment using the marijuana tax cash fund. A lot of the money that we use in this fund goes to kids' mental health crisis response. it goes to the well-being of kids can you on the mic tell us that this will not harm those programs
senator mullica thank you madam chair and thank you senator colker uh that is not yeah we we did not set it up so it would harm those programs this is coming from the reserve that the jbc set aside approximately 100 million dollars and so it's specifically from that reserve and it's a portion of it. And then, like I said, we made sure as well to have a component or a mechanism where a state building came back in and filled that $40 million in lieu of the cash.
Senator Kirkmeyer. Thank you, Madam Chair. When you keep talking about the reserve, we are talking about the state emergency reserve that's required under TABOR. Is that correct?
Senator Malka. I don't know the exact answer to that, Senator Kirkmeyer. It's my understanding that these dollar amounts that we're utilizing here are specifically for the marijuana tax cash fund. And so I'm not sure if it's actually the reserves where we typically think about the reserves. And I might have to phone a friend here. I could probably answer my own question.
Feel free to answer your own question. I just thought it might be good for you to answer. Senator Kirkmeyer. So we have $100 million of marijuana tax cash fund money in the state emergency reserve fund, which is the 3% fund that's required under the taxpayer's bill of rights. And what is occurring, I believe, with this is that we are taking, of that $100 million, we are going to take $40 million out of that Tabor reserve that's required, again, under the Taxpayer Bill of Rights to use for bonding so that we don't increase fees on insurance plans that will eventually increase premiums to people across the state of Colorado. And it is not affecting the marijuana tax cash fund programs that are funded out of that program at all. Correct?
Senator Mullica. Thank you. Answered your own question, Senator Kirkmeyer. Thank you.
Okay. Okay, committee members, are there objections to the adoption of L-10?
Yes.
Okay. Mr. Catlett, please poll the committee on the adoption of L-10.
Senators Gonzalez.
Aye.
Kirkmeyer.
Aye.
Coker.
Aye.
Liston.
Aye.
Aye.
Pelton.
Aye.
Mr. Vice Chair.
No.
Madam Chair.
Aye.
THE AMENDMENT PASSES 6 TO 1. COMMITTEE MEMBERS, ARE THERE ANY OTHER QUESTIONS? SENATOR KIRKMAYER.
No, ma'am, I don't have any questions. I have a couple amendments.
All right. Sorry to interrupt you. No. Do you want to introduce your amendments?
Yes. Thank you, Madam Chair. I would move, I move amendment L012.
Okay. And we also have an L011. Is that not getting moved?
Oh, I can move them both at the same time. That's right. I haven't done this in a while.
Okay.
So yes, I would move both L011 and L012. I would like to speak first to L012.
Okay. Senator Krueckmeyer, tell us about L012.
L012, I think, is to me, is a pretty simple request. It's essentially requiring that the enterprise gives a report, written report, after each forecast meeting that we have, so that's quarterly, report to the Joint Budget Committee with regard to the state of the enterprise, everything dealing with the enterprise. And then after the December forecast, but no later than January 15th, that the enterprise folks and the Division of Insurance would be required to come in and give a briefing, in-person briefing to the Joint Budget Committee. So again, it's to be aware so the Joint Budget Committee knows what's going on. This essentially is turning into a huge entitlement type program. And from my perspective, sitting on the Joint Budget Committee, I thought what happened at the special session was supposed to take care of it. And here we are just shortly later, not taking care of it. It's not taken care of and we're going in doing more things. So I think it's important for us, those of us who are on the Joint Budget Committee, I mean I think it's important for everybody to have this information. But I think it's imperative actually that the Joint Budget Committee get this information as we're going through our budget balancing process that we have to go through. So that's what L12 is about. Ask for an I vote. Okay. Bill sponsors, did you want to weigh in on the adoption of L12?
Thank you, Madam Chair. Sorry. Thank you, Madam Chair. I think we're okay with this. I think we would like to have a little further conversations about the – how many times we have to – they would have to report. But other than that, I think we were able to accept this.
Okay. Are there objections to the adoption of L-12?
I have a question.
Senator Kolker.
Thank you, Madam Chair. Since we did both of them, a question about, I think it's 11. Well, can we get, can we, 12.
We'll work on 12 first. We're on 12. All right, let's go. Go ahead.
Okay.
Are there questions about the adoption of L12? Seeing none, L12 is adopted. Senator Kirkmeyer, do you want to tell us about L11?
Yes. Thank you, Madam Chair. L11 is the first attempt of starting to put some guardrails on this program because again, it's fast turning into pretty much a state entitlement program or just an increase which ends up being an increase on plans, which ends up being a premium increase on other Coloradoans throughout the state of Colorado that don't have the opportunity to take advantage of this program or are not in that situation. So the first thing that it does is it's in the health insurance affordability enterprise. There's an enterprise that sets a premium rate for individuals covered by Omni-Salud and limiting and what it does is limit access to the on subsidies to insured individuals who earn less than 300 of the poverty line so of the federal poverty line So it is let me I trying to read the memo here Maybe I should not read that memo. The amendment's on the back. Sorry. And I apologize. I just need to go to the actual amendment, and I apologize. So what it essentially is doing is with the enhanced premium, folks that receive this, they have what is a 400% federal poverty level for a criteria, eligibility criteria. 400% of the federal poverty level for a family of four is $132,000. Their income could be $132,000. And this is making the change from 400 down to 300%. 300% of the federal poverty line would be actually about $100,000. And I'm just going to use the example of my own family and my own children who are a family of five. I don't know what the federal poverty level for a family of five is. I only looked at four. But they're a family of five. They don't make $132,000. They don't get to take advantage of this, but they, of the exchange. But they do have to pay increased premiums to help subsidize it, essentially. When any time you put a fee on the plans, that's what happens. It turns into an increase in premiums for those people who are on those plans. So that's the first thing that it does. The second thing that it does is it requires the commissioner with the, in consultation with the board of the enterprise, that they shall adopt rules specifying the premiums for state subsidized individual healthcare plans purchased by qualified individuals. And that would have to happen in the calendar year 2027. Doesn't say that it has to be January 1. Doesn't say what the premium has to be. It just says we've been hearing that they're going to work on getting premiums and that there would be premiums because right now there are zero premiums in the Omni Salute category that there needs to be some kind of premiums. And it's a step in the direction of how does this start becoming self-sustaining. I ask for an aye vote.
Senator Malaka and then Senator Gonzalez.
Yeah, thank you, Madam Chair, and thank you, Senator Kirkmeyer. I appreciate the conversation. I will say, I'll start off by saying this, is that we have worked diligently since special session to try to come up with a long-term solution. It's a difficult process to try to figure this out. The enterprise was designed with essentially half the dollars coming from the federal government, and those dollars are no longer coming in. And so how do we make this sustainable in the long term? And I appreciate you trying to bring up the conversation. And I think actually just seeing this amendment literally five or 10 minutes ago, or just now actually, because I just flipped the page, but the memo five or 10 minutes ago, I think that there is probably room to have that conversation and that requirement on the premiums. I do think that going from 400% down to 300%, you know, just at a whim, without really stakeholders, without really understanding the impacts of doing that, the impacts of potentially federal drawdown dollars that are available to us because of where we're at and because of the number of people, the number of people this impacts, upwards of 50,000 people, you know, I think is maybe not the best way of doing things. And so with that being said, I do think that there's probably a component of this amendment that we could figure out. But just to kind of arbitrarily go from 400 down to 300 with how many people it impacts with the dollar amounts impacts It not something that that we can support And I would ask for a no vote
Senator Judah. Thank you, Madam Chair. I just want to reiterate some some points here. If we went this way, 45,000 people would lose their their insurance. And that creates a. yes, 45,000 people would lose their insurance, and that would create a snowball effect of the healthiest people losing their insurance, and then ultimately them having to use the hospital as primary care. That would raise costs for the hospital, and that's what we don't want to happen. The other thing that's really, really important to remember is that federal poverty line set at 400% is the federal government's threshold for us to get those subsidies. If we lower this to 300, we're leaving a lot of money from the federal government on the table, which we depend on for the exchange. That, to me, is where we start to get really careless, and I don't think in our budget year, this year, last year, next year, we can afford to do that. I would be remiss if I didn't say the Omni Salud program has already been cut, and we're incredibly sensitive to the advocates and what that has meant for them. Seeing this amendment as of five minutes ago hasn't really given us a chance to talk to the advocates. But again, I really hesitate to put people on the exchange at risk and leave money on the table when we know we're in this fiscal situation for this year next.
Senator Gonzalez. Thank you. Madam Chair, I'd like to just go back to the explanation that you gave as the rationale for this amendment. Can you help me understand where the $134,000 number that you referenced for a family of five, where that originates from?
Senator Kirkmeyer.
Thank you. Apologize if I was confusing. But first of all, I said I referenced the federal poverty level at 400% for a family of four, and it's $132,000. And we got that off the Internet when we looked up and said, what's the poverty, what's 400% of the federal poverty level? So I explained that my daughter has a family of five, so it's probably actually something even more than that for a family of five. But I didn't look that number up. And I wanted to explain that when I was giving my amendment.
Sure. Thank you.
Senator Gonzalez.
That being said, for the family of five, I believe that would be 154, 720, 400 percent. Thank you.
POVERTY LINE FOR A FAMILY OF FIVE. WITH THAT, WHY 300 PERCENT? SENATOR KURTMEYER.
THANK YOU, MADAM CHAIR. SO CURRENTLY RIGHT NOW, IF YOU ARE A RECIPIENT OF CHIP, THAT IS AT 265 PERCENT OF THE FEDERAL POVERTY LEVEL. IF YOU ARE THE FIRST PEOPLE WHO ARE ON MEDICAID, THAT'S 138 PERCENT OF THE FEDERAL POVERTY LEVEL. IF YOU ARE ON SOMETHING CALLED THE EXPANSION POPULATION, I THINK THAT IS 165 OR 150 OF THE FEDERAL POVERTY LEVEL SO I WAS TRYING TO GET IT AND BRING IT DOWN MORE IN LINE WITH WHAT THE ELIGIBILITY REQUIREMENTS ARE WITH REGARD TO THE federal poverty level So I was trying to get it bring it down more in line with what the eligibility requirements are with regard to the other programs that are you know like Medicaid. So I was just looking at other areas where there's a federal poverty level, even
like in child welfare, it's not 400%. Senator Gonzalez, and then we'll go to Senator Colker.
Oh, I have it. Okay. And so then why, recognizing that there's all of these different numbers, with whom, I'll ask you the same question that I asked of the sponsors regarding L10, with whom did you stakehold this amendment prior to its distribution?
Senator Kirkmeyer.
So I did actually talk about the amendment and the thought with regard to the amendment with other members that are sitting here on the Joint Budget Committee that are here on appropriations. We talked about it. I'm not, I don't know if you would call it stakeholder-ing, but I did go talk to him about it. Also talked with the bill sponsor, Senator Mullica. Also talked with the plans folks and also brought up during the hearing in the finance about whether or not there should be premiums on the Omni-Salud portion of the enterprise. So brought it up in a public hearing and had discussions about it. And I even asked the Commissioner of Insurance when we were going to make fixes to this program so that we're not into this situation. So we had all those discussions on the record.
Okay.
Senator Colker.
Go ahead.
Senator Colker. Well, and I just have a follow-up that might help with Senator Gonzalez.
Senator Kirkmire, please make sure you speak into the mic.
When I was remote yesterday, I couldn't hear you most of the time because you weren't speaking directly. My microphone was probably off. Just make sure you're speaking directly into the mic. I appreciate it.
If you look on page three of the fiscal note of 178 that we have in front of us,
it says the Omni Salud program, which subsidizes insurance for Coloradans with incomes below 300% of the federal poverty level. and right above that says the on exchange subsidies are from 133 to 400 percent of the federal poverty level so omni salute is already reducing down to 300 and i'm just wondering if that correlates to this amendment of 300 percent as being on the top end because we're doing that for omni salute senator kirkmeyer yes thank you it does
Senator Gonzalez.
Sorry, Senator Bridges actually was. Go ahead.
Thank you, Madam Chair. I don't think these are the right cuts, but I've been asking advocates for weeks since this bill came out, how do we cut this program? I'm not the expert on this program. For weeks I've been asking how do we cut this? Because $140 million after we did $130, this is more than we did during the special session In tax credits that we can't sell, we're now going to go and we're going to do $140 million. This is the vote I will regret the most this year, I think, because I don't know how we're going to cut this thing. And every time I have a conversation with advocates, they say, oh, well, we just need to keep it going for this little period of time, and we'll fix it the next year, and it's going to be fine. no one seems to get that given the financial restraints that we're in given what the budget looks like that we have to make cuts this program will not be coming back the federal government is not going to start subsidies again it's not going to happen guys it's off the table not with this president maybe in three years and maybe show me a plan that shows this thing's going to exist in This is something I've been asking for for weeks. This isn't you guys. I know you're sitting here at the table, and it seems like I'm mad at you. I'm not mad at you. I'm mad at all the folks that I've been talking with that have made zero progress in figuring out a way to wind this down for the people of Colorado. I don't want folks to just get cold turkey on this and, like, just cut right away, no explanation, no ramp. We need to have a ramp. We did this in all sorts of things that we cut in the JBC. We provided a ramp. This needs to be a ramp this year to zero next year because $130 million of tax credits we can't sell and now $100 million in bonding? Bonds are for things like bridges and schools, things that have ongoing benefit. For one year, and I know there's some financial wizardry that apparently will be occurring on the back end of this to make the people who buy the bonds pay for the bonds, which seems crazy to me. But, like, this cannot continue. These aren't the right cuts. I will be voting for them today because it's the only thing I've seen, and maybe this actually gets advocates to start figuring out what we actually cut to make this program wind down.
Senator Mullica.
Thank you, Madam Chair. I know there wasn't a question there, but I do think that it – That's a loaded question, Senator Bridges. uh uh we've been dealt a crummy hand you know and in committee i i spoke about this that uh these are real lives you know uh when we talk about 45 000 people losing subsidies to make their insurance affordable those are real people those are real families uh this program impacts real people in our communities and uh and that matters um and i i know you know that matters uh senator bridges i think with this amendment uh coming last minute and and and i i don't disparage the conversation i agree i agree this is not a sustainable way of doing things unfortunately it's the hand we've been dealt and these are real people and we're going to do the best that we can to take care of vulnerable people in our state and that's what we're trying to do with this bill this amendment though will cost the state money this amendment will mean we lose more federal dollars and that's that's not what we should be doing if we're going to be looking at that if we're going to be looking at what ratcheting down looks like or or paring down looks like we should be trying to do it in the most responsible way in a way that doesn't lose dollars for the state in a way that that we try to stretch these dollars as far as we can in a way that makes sure that they're being efficient as we can, doing the most good as we can, whatever that pare down looks like. That's not this amendment, though. And I just want to be clear, and I respect viewpoints. I think there's a valid debate here, valid conversations to be had. I'm not convinced that this is the best way to do it, though. And that's why we would ask for a no vote.
Okay. Senator Bridges?
Thank you, Madam Chair.
And then we'll go to Senator Kirkmeyer. Oh, and then we'll go to Senator Liston and then Senator Kirkmeyer. And then I think we would like to wrap up and vote on the amendment.
I still have some questions.
Senator Bridget.
Thank you, Madam Chair. Yeah, I'm on the Budget Committee. We spent six months making decisions that impact real families in Colorado. And our criteria for a lot of those decisions was, will people die if we make this cut, or will they not die if we make this cut? I understand the consequences here. I understand the pain of these decisions. I've been doing it for six months. We can afford million more in this program We have to make cuts This amendment at least is a starting point to have a conversation about how we get this down from million in the last week of session I don't like these cuts. I want to be clear. I will vote 100% for some alternative to these cuts that maintains the dollar amount. These aren't the right cuts, but if this bill leaves this committee at $140 million, I know for sure it's going to land on the governor's desk at $140 million. And it may still land on the governor's desk at $140 million, even with this amendment. But at least we have some starting point for the conversation about how to effectively and in the fairest way possible for the people of Colorado, all the people of Colorado, wind this thing down.
Okay. I think Senator Liston.
Thank you, Madam Chair. I'll ask the sponsors. I'm a little bit confused, but I want to get it straight. So if there's a family of four that makes less than $132,000, let's just round it down and say $130,000, they are getting subsidized for their health insurance. Is that correct? Versus, let me finish, versus a family out there of four that's making $140,000, they don't get subsidized. Is that correct?
Senator Mullica.
Thank you, Madam Chair, and thank you, Senator Liston. You are correct. They have to meet that 400% threshold to qualify for the subsidies, for those on-exchange subsidies to try to make their health insurance more affordable. So if they're above that 400%, they would not qualify for those subsidies.
So they don't get any subsidy?
Senator Liston.
Yeah.
Senator Mullica.
Thank you. At least these subsidies that we're talking about, I don't know about any subsidies, but the subsidies that are within this enterprise, they would not be eligible for. Okay.
Thank you. Senator Kolker had one more question.
It was really aimed at both the bill sponsor and the amendment sponsor in the timing of the cuts. One thing we've heard was that we lost tax credits, but yet if we leave this at 400%, we're going to miss out on federal funding. But I thought we lost that funding. and is the funding for this, you know, from what we did in special session, how long does that keep the program going? And when do these take place, both the $140 million and this, if we go to 300%, does this give us a year? I mean, are we talking about 2028? Are we talking about 2027? When does people losing insurance take place?
Senator Mullica.
Thank you, Madam Chair. Thank you for that, Senator Kolker. These are – so what we're talking about losing are federal drawdown dollars. And so we're able to draw down dollars through the subsidy program. We're also able to draw down significant dollars through the reinsurance program. The dollars that we're talking about that are gone are the premium tax credits that the federal government didn't renew that amounted for roughly $150 million into the enterprise. And that's how they designed the enterprise was with those dollars. in place. And so they're two separate dollars. As for what this money goes to, it goes for the 2027 year But the way that it paid out is those dollars aren paid out until June of 2028 because the way insurance works which is really confusing is they paid in arrears And so they pay those dollars out in June 2028 to cover the 2027 year essentially Yes, so this covers the 2027 year to try to essentially keep the program at status quo of where it was at for the 2026 year into the 2027 year.
Senator Judah, and then we're going to go to Senator Gonzalez.
Thank you. And Senator Coker, just to reiterate, those dollars kick in from the federal government at or above the 400 percent federal poverty line. And so this isn't just a random number pulled out of a hat. That's why the 300 would impact the state a lot and leave those dollars on the table.
Senator Gonzalez.
Just a comment about the amendment, because now that I understand that the Vice Chair is going to be supporting this amendment as a way in order to force conversations to the table, let me be very clear. I think that it is atrocious to be attempting to force a conversation on the backs of the poorest Coloradans and the most marginalized Coloradans. Have conversations. Don't put this amendment onto this bill.
Madam Chair. Senator Bridges.
Thank you, Madam Chair. I've been asking for weeks, weeks, weeks. I have acknowledged, I'm not the expert on this thing. I've acknowledged that other people know better what we can cut that maintains federal matches, what we can't, what the percentages are. Literally every time I have a conversation about this, the numbers are different. Every single time. Everybody has different numbers. DOI has different numbers. the number of people impacted by this, the percentage that is covered by Omni Salud, the percentage that's the wrap. Everything is crazy every time I talk about this bill. So to accuse me of saying that this is bad policy for me to just vote yes on this, like I haven't been trying for weeks to have some alternative solution? I'm sorry. $140 million is not sustainable. I will not vote for this bill coming out of this committee at $140 million.
It appears that we don't have a path out of this committee today. Okay. In that case, Madam.
Yeah, I mean, if you all want to continue to go after, talk to each other,
I would suggest you do that in a different forum. Senator Gonzalez.
Thank you, Madam Chair. I would request that this bill lay over in order to force better amendments. I appreciate that I'm seeing this amendment for about the first time, for about the first few minutes ago. I respect that the Vice Chair has been asking people for weeks. The first time I'm seeing amendment language on this is this, and I cannot support this.
Okay. I think we, Senator Kirkmeyer, if you have one thing to say.
I have been sitting here patiently. Go ahead. And then we will. My mic is on. And it's the first time I've heard that people can't hear me when my mic's on. So we see numerous amendments in this committee the day of. In fact, let me just read through the chart today. We be distributed at meeting We be distributed at meeting We be distributed meeting We be distributed meeting four of them So whatever But I a little ticked off myself Maybe we should do a senatorial five because I can be clear as well. We sit here and we talk about basically that I'm arbitrary and that I'm being careless. I really don't appreciate that. And the thing is I'm not being careless. I'm looking out for the hundreds of thousands of individuals who have had increased premiums to pay for this program. A hundred and twenty-five million dollars worth of fees. And we get a bill presented to us, one, after a special session where this was supposed to be taken care of. I'm just as upset as Senator Bridges is. We both sit on the Joint Budget Committee. We have been saying for months now how difficult the cuts we've had to make. And here we are, last week of session basically, with a bill that's about a hundred and forty million dollars. I'm the one who went to the sponsors to try and figure out a way not to put an additional 500 bucks per year in premiums on top of people. We didn't even get a fiscal note on here for how much this was going to increase our budget in our state plan. So there's a lot that's wrong with this, and I don't think it should be laid over. We need to have these discussions. We need to move it on. But whatever.
But you know what? We can all be very careful about the words we start choosing. But to act like these things haven't been discussed with people and stakeholders haven't been at the table is wrong. They have been. Okay. Let's have a senatorial five. Good idea. We're not even to the bill. I'm really ticked off.
yeah yeah
I was clear with why I wasn't. Is there... I asked you, no. I asked you, no. I think it's really good. I mean, it's a lot of further conversation to put together those slides. Yeah, yeah. And then I'm going to have a conversation about guardrail politics program so that we're not stuck with $140 million cuts someplace else in our budget to fund this. or that we're gonna put more premiums on other people. The other hundreds of thousands of people in our state who are paying for this program. I didn't ambush anybody. I'm sitting there calling me, arbitrary, careless, and now you're saying I ambushed you? I did not ambush you. I've been talking to your bill sponsor since the committee. I'm the only one who's figuring out how to try and save your bill. I'm not. You are, by bringing the amendment. Thank you. Your kids told a bill with zero solutions. Thank you. Thank you.
Okay, we are going to lay over Senate Bill 178 and to a future appropriations meeting. And we are going to move on to Senate Bill 125. Senator Colker.
Sorry. I move. We have an amendment to 125 and I move amendment L006.
Okay. And Senate Bill 125. Committee members, are there any objections to L006? And I assume L006 means we are not going to run the J amendment.
That's correct.
Okay. Committee members, any objection to L6? Seeing none, L6 is adopted. Committee members, any questions about the bill, Senator Kirkmeyer?
Yes. Now you need to tell us what L006 does and how it impacts the fiscal note.
I was going to wait for the question.
Great. Senator Kolker.
So this allows the Department of Flexibility to seek funds to implement this bill from outside the general fund. It changes a few shells to maize to eliminate the need for an appropriation in the bill. The goal here is there's another bill with potential funding that may or may not pass that can be used to pay for this. And what we're trying to do is keep this flexible to say that this bill can go forward without funding by allowing the department basically the opportunity to figure it out through appropriation, their own internal funding. But they also are not required to hear every case. We want this open for future ability for them to do this. And if I have my co here too if she has anything to add Senator Markman Thank you Madam Chair and thank you Senator Kirkmeyer for the question
If you look on page 24 of the bill, that's a section 22-29.5-114. That's the component that we're saying. That's the one that drove the fiscal, and that's the one we're saying. If we get money, great. If not, the other provisions of the bill can still be there. but this just wouldn't be implemented. But it's just that section.
Any other questions about Senate Bill 125? Senator Liston.
Yes, just to be clear, so is this under L-006, is this repealing the gifts, grants, and donations?
Senator Marchman.
It is not repealing the gifts, grants, and donations. it is basically just opening up an opportunity to use monies other than what's in the general fund. So if this other bill passes and there's funding, great. If it doesn't, there's not funding for this bill. But there's still a number of sections of the bill that can move forward without the funding that's talked about in L6. I don't know if that helps.
Okay. Any further questions? Seeing none, Mr. Catlett, please poll the committee on the adoption of Senate Bill 125 as amended by L6.
Senators Gonzalez.
Aye.
Kirkmeyer.
No.
Coker.
Aye.
Liston.
No.
Pelton.
No.
Mr. Vice Chair.
Aye.
Madam Chair.
Aye. That bill passes 4-3. Next up, we have Senate Bill 180, and we have our bill sponsor in the room, bill sponsors. And we have L10 in front of us. And bill sponsors, is that what you would like us to run today is just L10 and not J1 or L8? Senator Bright.
Thank you, Madam Chair. That's correct. L-10.
Okay. Mr. Vice Chair.
Thank you, Madam Chair. I move Senate Bill 180 and L-10.
Committee members, do you have any questions about the amendment? Senator Pelton.
Thank you, Madam Chair. So this question for the bill sponsor is about around the rural banks and rural lending. Is this what was supposed to take care of this aspect of it? Senator Bright.
Thank you, Madam Chair. Thank you, Senator Pelton, for the question. So we will be addressing bank issues on the floor, if we can get there. This addresses the appropriation and making sure that the appropriation is taken care of. Thank you.
Any further questions or? Okay, so did we already do any objections to L10? Did we adopt L10 yet? Okay, any objections to Senator Liston?
Object.
Okay, Mr. Catlett, please pull the committee on the adoption of L10.
Senators Gonzalez.
Pass.
Senator Kirkmeyer.
Aye.
Coker.
No.
Liston.
No.
Pelton aye Gonzalez aye Mr Vice Chair Aye Madam Chair.
Aye. I lost track, though. 5-2. That amendment passes. 5-2. Okay. Committee members, any further questions on Senate Bill 180 as amended? Seeing none, Mr. Catlett, please poll the committee on the adoption of Senate Bill 180.
Senators Gonzalez.
Respectfully, no.
Kirkmeyer.
Aye.
Colker.
No.
Liston.
No.
Pelton.
No.
Mr. Vice Chair.
No.
Madam Chair.
No. That bill is lost on a vote of 6 to 1. Sorry about that. Mr. Vice Chair.
Thank you, Madam Chair. I move to PI on a reverse roll call vote. Any objections?
Seeing none, that will be postponed indefinitely on a reverse roll call vote. Okay. Next up, we have Senate Bill 187. That is Senator Bridges. Thank you, Madam Chair. I move Senate Bill 187. This is the Committee of Reference for Senate Bill 187. Is there anybody in the room who would like to testify on 187 or online? Seeing, okay, there's one online. Let us call up Rachel Reader. Ms. Reader, we can see that you're here. Thank you for joining us. Please state your name and who you're with and you have two minutes to testify. Thank you, Chair Amabali, Vice Chair Bridges, and members
of the committee. Thank you for the opportunity to testify today. Healthcare Policy and Financing Director Gretchen Hammer wanted to be in attendance today, but she's on a flight to her son's graduation and asked me to speak just a few words in her stead. My name is Rachel Ryder, and I'm the Director of Policy, Communications, and Administration at the Department of Healthcare policy and financing. Speaking today in support of the establishing commission on Medicaid, Senate Bill 26187. The commission's work and the report it produces will help inform future policy at a critical juncture in the Medicaid program. The committee is well aware of the challenges, the federal challenges coming ahead that will reshape the Medicaid program, as well as the budget constraints the program currently faces. We appreciate the opportunity to partner with you on this work ahead. This commission creates an important opportunity for deeper dive discussions and dialogue outside of just the legislative session, and will focus on the program serving more than 1.2 million Coloradans. Thank you for this thoughtful legislation and the opportunity to testify in support today. The department stands ready to assist the commission in its important work over this over the coming months. Thank you
Committee members any questions for the witness senator Kirkmeyer I don have a question I just have a comment about the bill Okay thank you Madam Chair I would just say this This is actually a Joint Budget Committee bill and I in full support of it
I appreciate the work that our Chair of the Appropriations Committee did to help get this legislation put together. I appreciate what we're trying to do here. I just want everybody to understand that the reason that's coming forward is because at the Joint Budget Committee, and even when you've sat in on, people have listened in on the health and human services committees. I think we've got some huge issues and I think the number, the first bullet here about reviewing the state Medicaid program's administrative structure and identifying opportunities, but mostly identifying challenges is why I'm in full support of this bill. There's a lot of work that needs to be done and again, I'm just going to say from my perspective on the Joint Budget Committee, I'm tired of the surprises and I'm tired of not getting all the facts. So, you know, we sat through a lot of committees where we ask for data, and we get data one day, and the next week it's different data. So this is an extremely important bill, and I hope everyone votes for it and that we all pay attention to what we're doing here on this commission because there's a lot of work to be done, and there's a lot of cleanup that needs to happen, especially with this department. Thank you.
Thank you. Are there any other questions for the witness? or is there anybody else in the room or online who wishes to testify? Seeing none, the witness phase is complete. And I will just echo Senator Kirkmeyer's thoughts. This is more than a third of our budget, and we did not feel like we had everything we needed to make all the cuts that we made. And I know I didn't feel like I knew enough to really target what we were doing and to make sure that we weren't hurting one group of people over another group of people and that we were doing things that would actually save us money. I mean, we had stuff in the budget that it turns out we had one bill we had to kill because it didn't turn out it saved us any money even though we were told it would save us money. And there's a lot of things that need to be looked into, and I would encourage everyone to vote yes. Mr. Catlett, please poll the committee.
Senators Gonzalez.
Aye.
Kirkmeyer.
Aye.
Coker.
Aye.
Liston.
Aye.
Pelton.
Aye.
Mr. Vice Chair.
Aye.
Madam Chair.
Aye. That bill passes unanimously. I have some amendments. Okay, next up we have Senate Bill 188. Senator Kirkmeyer.
Thank you, Madam Chair. I move Senate Bill 26-188 and ask for an aye vote.
Committee members, any questions on Senate Bill 188? Senator Kolker.
Thank you. And just looking at the state expenditures, it says that it transfers 14, eliminating a transfer of 14 million. from HICPF to DHS so that we can use the state's Medicaid managed care program. And this amount then is split equally between general fund and federal funds. Does that then save us $7 million? Am I reading that right? And is that accounted for somewhere else that I don't see on this fiscal note? Senator Kirkmeyer.
Thank you, Madam Chair. No, it doesn't save us $7 million. I wish it did. But it does not. And it's accounted for. We're eliminating the transfer, so it will be accounted for over in HICPF, over in health care policy and finance.
So real quick, we were receiving the federal funds then through HICPF, is that correct? We were receiving $7 million then.
Senator Kirkmeyer.
That's correct. It's the Medicaid program, and that's where the money goes through in the first place. They're the administrators of the Medicaid program in state of Colorado.
Okay, Mr. Ketlep, please poll the committee on the adoption of Senate Bill 188. Oh, you know what? I didn't ask if anybody wanted to testify on 188, and I don't think we have anybody, but I will just ask, would anybody in the room like to testify on the adoption of Senate Bill 188 online. Seeing none, the witness phase is closed. Mr. Catlett, please pull the committee on the adoption of 188.
Senators Gonzalez. Aye. Kirkmeyer. Aye. Colger. Aye. Liston. Aye. Pelton. Aye. Mr. Vice Chair. Aye. Madam Chair. Aye.
Mr. Vice Chair. May I suggest the consent calendar?
Any objections? Seeing none, that would be placed on the consent calendar. Next up, we have Senate Bill 189, and I see Mr. Majority Leader here. His coat will stay away. He's got his coat on because we're mean to him. He's just going to leave. So, Senator Rodriguez, I see J-1. Is that what you would like us to adopt today?
Okay. Mr. Vice Chair. Thank you, Madam Chair. I move Senate Bill 189 and J-001.
Committee members, any objection to the adoption of J-1? Seeing none, J-1 is adopted. Committee members, any questions for the bill sponsor? Senator Kirkmeyer.
Yes. Could you explain the fiscal note, please?
Majority Leader Rodriguez. Everyone gets this question, so.
Yeah, you should all be able to explain your fiscal note. Yeah.
The fiscal note is for the rulemaking that we've implemented under Senate Bill 89 for the Department of Law. I think the money was discussed. The fiscal note has been reduced from probably the $5 million discussion you had on Senate Bill 205 earlier in the year. Sweet.
Okay. I will just say I'm sensing the end of the rainbow, and I want to applaud the majority leader for all of the work that's gone into this very years-long process. and I'm not going to jinx the bill, but thank God. Mr. Catlett, please poll the committee on the adoption of Senate Bill 189.
Senators Gonzalez.
Aye.
Kirkmeyer.
Aye.
Coker.
Aye.
Liston.
Aye.
Pelton.
Aye.
Mr. Vice Chair.
Aye.
Madam Chair.
Aye. That bill passes unanimously. Not on consent, though. We should talk about it a little bit. All right. Next up, we have Senate Bill 1015. And Mr. Vice Chair, can you?
Sure. 1015, Senator Mobley.
I move Senate Bill 1015.
We are the Committee of Reference. Is there anyone who would like to testify? They are online. can we please bring up Mr. Jack Murphy, Mr. Lance Cheslock and Jack Murphy again. So I think just those two. And anyone else who would like to testify in the room or online, please make yourselves known now. Mr. Murphy.
Thank you Madam Chair and good morning My name is Jack Murphy and I the Director of Government Affairs for the Colorado Nonprofit Association We represent more than 1,000 nonprofits across every mission area and region of Colorado. Thank you for the opportunity to testify in support of House Bill 1015. The association focuses its advocacy efforts on sector-wide and mission-wide issues, that is, policies that strengthen nonprofits broadly or all those serving a shared public purpose. Homelessness services are a clear example of that shared purpose. Our members approach this work in different ways, serving this mission across the full continuum of prevention, shelter, and stabilization. This is precisely why we support the extension of the Colorado Homelessness Contribution Tax Credit. It supports the entire ecosystem of services and benefits, all nonprofits working in this space. The nonprofit sector is facing a critical moment. Nonprofits are facing a campaign of rhetoric that questions their role and effectiveness while facing reductions in funding from federal and state partners. While the sector navigates these challenges, the need for these programs and services continues to increase. The Homelessness Contribution Tax Credit is essential infrastructure for navigating this moment. When public funding opportunities shrink, private donors must be empowered to fill the gaps. This credit drives private investment in homelessness resources and extending it ensures that private dollars continue to support this mission. We know this tax credit is effective. In the most two recent years of data, 2023 and 2024, the credit incentivized more than $20 million annually in charitable contributions to homelessness-related causes. That is, private capital mobilized in support of public goals at a time when those resources are critically needed. As the state faces fiscal constraints, House Bill 1015 ensures that Colorado retains a proven and accountable mechanism to keep essential services operating and people housed. The association respectfully urges your support for House Bill 1015. Thank you, and I'm happy to answer any questions.
Thank you. And Mr. Cheslock is here for questions only. Do we have any questions for either of these folks? Seeing none, thank you very much for your time. Anyone else who would like to testify? Seeing none, witness testimony phase is closed. Any amendments? Seeing none, the amendment phase is closed. Any discussion?
Senator Kirkmeyer. Thank you. Yes, for the bill sponsors, it would be nice to have you explain on the record about the fiscal notes that is in the out years. Senator Mobley.
Thank you, Madam. I'm sorry. Thank you, Senator Kirkmeyer and Mr. Chair. So this is an ongoing tax credit, and these are the decreases to the state revenue that this tax credit causes. But I will add that these tax credits account for millions and millions and millions of dollars getting donated to homeless services across the state. and I've gotten an enormous amount of outreach from people who are making these contributions and want to continue to make them. And I feel like this is an incredibly worthwhile thing for our state to incentivize. It's a very complicated problem, and as you all know, I have some experience with a loved one who has been homeless, And this is a small thing that we can do to make sure that we're putting as much resource into this as we can.
Senator Liston Thank you Mr Chairman Mr Vice Chairman Yeah I heard from some constituents about this bill and quite frankly I was not aware that there was a homelessness tax credit But I think this is a good idea. You know, there's the carrot and stick approach. We're using the carrot. and I'm sure that there's a lot of people, good people out there, that would be happy to make a donation to this particular, I say a donation. If they knew about it, probably the biggest hurdle, or one of the biggest hurdles is a lot of people are not aware that this type of tax credit is available. And there are, like I say, good, well-meaning people out there that have the resources and that would rather donate to something like this than not. So I'll be in support of the bill because it's a good idea, and I commend the bill sponsors. Thank you.
Well, what a positive comment. Any other comments from the committee before we vote?
Mr. Catlett, please poll the committee. Senators Gonzalez.
Aye.
Kirk Meyer.
Aye.
Coker.
Aye.
Liston.
Aye.
Pelton.
Aye.
Madam Vice Chair.
Aye.
Mr. Chair.
Aye. That bill passes unanimously. Mr. Vice Chair, would this be a good candidate for the consent calendar? Is there any objection to the consent calendar? Seeing none, that bill will be on the consent calendar. Congratulations.
Thank you.
Okay. Next up, we will be hearing Senate Bill 1250. I'm sorry. House Bill 1256. And I see our bill sponsor is here. And committee members, any questions for the bill sponsor on 1256? We don't have any amendments. Mr. Vice Chair.
Thank you, Madam Chair. I move House Bill 1256.
Senator Kirkmeyer. Yes. I want the bill sponsor to explain the fiscal note. It says we have $141,000 of general fund expenditures.
Senator Cutter. Thank you, Madam Chair. This fiscal note, what I understand is that this is already – the Department of Correction already has this money, and JBC actually voted – they tried to return it because they were underspending on a program that they're committed to supporting. and JBC rejected their attempt to return the money. And so this money is rightfully belongs to this program that's been in place since 1972 and is being under, they haven't been spending appropriately for this program.
Senator Kirkmeyer. Could somebody on the JBC staff tell us what we did here? Why would we reject and why are the monies being, are they being spent in the way that they were supposed to be spent?
I don't see anybody raising their hand, but I will say my recollection was that they were underspending, and we decided to maintain this budget because we knew that this bill was potentially going to come to make sure that the money does go to this worthy cause in terms of helping to reduce recidivism. 100 bucks. Committee members any further questions Seeing none Mr Catlett please poll the committee on the adoption of House Bill 1256
Senators Gonzalez.
Aye.
Kirkmeyer. No.
Colker. Aye.
Liston. No.
Pelton. No.
Mr. Vice Chair. Aye.
Madam Chair. Aye. That bill passes 4-3. Thank you, committee. Okay. Okay, next up we have House Bill 1276, and I see Senator Weissman. And we have J-2 listed. Is that the amendment that you would like for us to run, Senator Weissman?
Yes, J-2 catches the probe up to the substance of the bill. Right now the probe is written to use general fund. That is no longer correct. the J2 would update so that the source is cash flow.
Mr. Vice Chair. Thank you, Madam Chair. I move House Bill 1276 and J002.
Committee members, any questions?
Senator Kirkmeyer. Yes. Thank you. Thank you, Madam Chair. And the cash fund originates from where?
I'm sorry, I couldn't hear you. Senator Weissman. Sure. So part of the bill is inspections of certain entities as defined. They would pay a fee for that inspection, the usual sort of fee-funded model of government that we do. That's what goes into the cash fund.
Thank you.
Senator Liston. Thank you. So what are these facilities? Can you elaborate? Give us a little more detail.
Senator Weissman. Sure. I guess without trying to go too much into the substance of the bill here, this part of the bill that we're talking about concerns facilities that may operate to hold folks who are detained for civil immigration purposes. There is a prominent one, which is already the subject of existing law, happens to be in my district. There may come to be others in the state. This kind of thing has been pretty broadly in the news in the state and in the country. There's a lot that as a state we can't do in these federal matters. What we can do is utilize the traditional health, safety, and welfare power of state government to see to just basic kind of sanitary conditions of civil detention. So that's what we're talking about here.
Senator Liston. So who pays the fee?
Senator Weissman. The fee is assessed on the entity being inspected, which might be a contractor who's operating the facility.
Okay.
Mr. Catlett, please pull the committee on the adoption of House Bill 1276 as amended by... Oh, I don't think I did J2 yet. Are there any objections to the adoption of J2? Seeing none, J2 is adopted.
Mr. Catlett, please poll the committee on the adoption of 1276 as amended by J2.
Senators Gonzalez. Aye.
Kirkmeyer. No.
Coker. Aye.
Liston. No.
Pelton. No.
Mr. Vice Chair. Aye.
Madam Chair. I that bill passes four to three. Thank you committee. Okay. Next up we have house bill 1419. We are the committee of reference for this. Um,
Mr. Vice chair. Thank you, madam chair. I move, uh, house bill 1419 and L 010.
Okay. Committee members, any questions?
Senator Kirkmeyer. Thank you, Madam Chair. So in documents that we received when we were talking about this during the Joint Budget Committee, it talks about there were discussions about how it's not allowed adjustment in the 2425 revenues, your over-refund. So can you explain how you're getting around the accounting rules?
Senator Bridges. Thank you, Madam Chair. I don't believe we're getting around accounting rules. What the big whatever bill did, H.R. 1, is it reduced revenue in a previous year when we'd already closed the books, which meant that the TABOR refunds that we had given in that year were in excess of what we should have given, given the reduction in revenue caused by H.R. 1. And so what we are doing is exactly what it is that we have in state law that we are supposed to do, even without this bill. The state issues a TABOR refund. If the TABOR refund is greater than the amount of state fiscal year spending in excess of the limitation on state fiscal year spending, if the state fiscal year over-refund, the state reduces the amount of the next TABOR refund by the amount of the over-refund. That is on page 3 of our fiscal note. Because the big whatever bill was signed into law after the close of the state fiscal year, These impacts were not accounted for in 24-25, which is what I just stated. And so the revenue change, the difference that we're making, will apply in future years instead because we can't go back and change previous year once we've closed it.
Senator Pelton. Thank you, Madam Chair. Senator Bridges, don't you think we're opening ourselves up for lawsuits to do this retroactively? That's basically what you're doing here by going forward with it. And I mean, we've already lost the state of Colorado has already lost a lot of lawsuits and cost us millions of dollars, which hurts our budget. So why would we do this to open ourselves up for more lawsuits?
Senator Bridges. Thank you, Madam Chair. The refund that we gave in the 2025 tax year was far larger than we should have given because of the changes created by H.R. 1. Because H.R. 1 made changes to tax law retroactively, which we as a state automatically adopt because that is how our state tax code works. So because those changes were made retroactively, it meant that the amount that we had given out in table refunds was more than we should have given out. And existing state law says that we make up for that difference in future refund years. And so all we're doing in this bill is making up for that difference exactly as it is already required for us to do in existing law.
Senator Kirkmeyer, if it's within existing law, why are we changing law?
Senator Bridges, we also have others here who could probably help us. Thank you, Madam Chair. I think that if you look at the bill, we are splitting this refund between fiscal years. We are outlining the process in which we are going to make this adjustment. It is larger than we've seen in previous years and I think justifies an independent bill.
Senator Kirkmeyer. Thank you. So then what was the need for the amendment that was made in the House? And it on page four and it in the pre or it in the engrossed bill It talks about the September 26th the controller certifies pursuant and it goes on So what was the need for that amendment On page 4, it's on line 14. It's a new 4.5, or changes to 4.5.
Senator Bridges. Thank you, Madam Chair. We do have the drafter here who may be able to give a better answer for this. I can take a shot at it.
Mr. Lively, we're all looking at you. And is the state auditor here today too?
I don't believe so, no.
I will take – yeah, go ahead.
I was, I believe I know the answer, but I don't want to say something wrong on this, especially with Senator Kirkmaier. Mr. Lively. Or for other legal reasons, I'm sure.
Thank you, Madam Chair.
The amendment that was passed in the House made two changes, one of which is easier to explain than the other. So I'll start with the easier one, and hopefully that gets itself on the right foot. So the easier change was changing the date when the controller has to make this calculation to determine the reduction in future TABOR refunds. That date previously was, I believe, in December, and that was causing timing issues between the controller's office, the auditor's office, and I believe OSPB as well. So pushing that back a couple of weeks was, I think, purely a technical change. As far as the more substantive change to make this contingent upon how state fiscal year spending turns out for 2526, I personally do not feel comfortable speaking on the justification of that amendment, but I will say that Amendment L10 includes a paragraph added to the legislative declaration to explain that change.
Okay. Senator Kirkmeyer. All right. Well, so can the bill sponsors tell me why the amendment was needed? I don't know. Is anybody else concerned that our legal folks don't want to really get into speculating on it? So I don't know what in the legislative declaration was changed. L10 is what we did today.
Mr. Lively.
Thank you, Madam Chair. Pierce Lively, Office of Legislative Legal Services. L10 is an amendment that I believe will be offered. Sorry, I thought maybe already had been, but if it had not, will be offered in the next few minutes in this committee and so you all should have copies of the majority of the text there is adding a paragraph to the legislative declaration and that paragraph explains that contingency language in the bill.
I see it. You see it. Senator Kirkmeyer. Great. So, it says the bill doesn't take effect if the state doesn't have a tapered surplus in 25-26. Does that go on and on or is it just in that year? I mean, like, for example, if we were to have a taper surplus in 26-27, then does the bill take effect?
Mr. Lively. Thank you, Madam Chair. Senator Kirkmeyer, no. This is a one-time switch because this is based purely on the controller certification in September of this year. And the necessary calculation has to be made in November of this year. So if a similar determination were made in September of say 27, we would be past the necessary deadlines in the bill and the bill would not go into effect.
So Senator Kirkmeyer. Thank you, Madam Chair. So just so I clear if this bill doesn take effect if there is a Tabor surplus in 2526 correct Correct Yes Yes And as of right now we believe there is no Tabor surplus for 2526
I'm guessing Mr. Lively doesn't want to speculate on that, but he can if he wants to. Maybe Mr. Zabinski would like to come up. I see Mr. Zabinski has his hand up, so Zabinski, Zabinski, sorry.
Mr. Zabetsky. Thank you, Madam Chair. Members for the record, Greg Zabetsky, Chief Economist with Legislative Council staff. Senator Kirkmeyer, it depends on which forecast you look at. If you look at the LCS forecast, we would expect to be below the referendum CCAP under current law and assuming signature of the budget package and other placeholders for balancing. Under the OSPB forecast, the published March 2026 OSPB forecast that you all used for balancing expected that revenue would be below the Tabor limit for FY2526. You have made, through the course of the session, after issuance of the forecast, a number of downstream balancing decisions that cause state revenue to be closer to the referendum CCAP in 2526. Most notably, the JBC orbital package included a bill to make transfers from the unclaimed property trust fund in FY2526 that causes revenue to become subject to TABOR for that year. The assessment of all of those bills together in the context of the OSPB March forecast would put revenue still below the Tabor limit before the adoption of House Bill 1419. If House Bill 1419 is adopted, the bill would require the determination after that. So as Mr. Lively explained, there would be a issuance of the September 1 revenue certification that's required under current law. After that certification is issued, if it shows that revenue is below the Tabor limit, the referendum CCAP, which we think under both forecasts it would, then House Bill 1419 takes effect, or the substantive provisions of House Bill 1419 become active. And those provisions would result in an increase in the accounted amount of fiscal year spending, revenue subject to labor, for FY2526. My assessment of the OSPB forecast and the legislation that the General Assembly has adopted or assumed placeholders for is that that would cause revenue to exceed the referendum C-cap because you'd be close enough to the ref C-cap prior to the enactment of the substantive provisions of 1419. Senator Bridges.
Thank you, Madam Chair. Yeah, thank you. Got to phone a friend and have refreshed myself on where we are. Essentially, the amendment in the House turns the bill off, and the amendment here talks about why. So it turns the bill off if we're above the Tabor cap. and that is I think the long and the short of it
Senator Kirkmeyer and why did you feel it was necessary to put that in
why do you think they felt it was necessary to include that amendment surely they spoke to you about it
Senator Bridges just so everybody understands this is not a joint budget committee bill no it is not thank you Madam Chair I think it important to turn that off if we are above the Tabor cap because this bill is part of how we are working on next year budget and the way that these dollars are accounted for if we go above the Tabor cap we've known this from working on this bill, if we go above the Tabor cap in the 25-26 year, then the money is accounted for very differently. That's not how we put the package together. I'll just say it's out of an abundance of caution that we make sure that we are within the law.
That we're within the law?
Yeah, that we are doing what we are supposed to do with regard to the TABOR refunds.
Senator Pelton. Thank you, Madam Chair. something similar happened in my district with the Lower South Platte Water District. They collected too much money. They had to give it back. However, everything was challenged in court. So where would this put us if it was challenged in court and found that we didn't do the correct thing and the legal challenges won on this? Where would this put us in next year's budget? Well, I would love for Mr. Zabetsky to answer that
because I know we have talked about it. Mr. Zabetsky.
Thank you, Madam Chair. Thank you, Senator Pelton, for the question. I don't know. I guess I think it would depend on what a court found, what the violation were determined to have been, and what remedies were ordered by the court as a result of that decision. Perhaps it is helpful to compare, well I don't even know if it is House Bill 1419 would result in a like in a reduction of the refund obligation that would otherwise exist for FY 2627 if House Bill 1419 were in some way struck down then presumably that refund obligation would continue to exist at minimum there may be other determinations by the court that would have that would have fiscal consequences I don't I can't speculate on what those would be but the JBC for balancing purposes has assumed a 153 million dollar placeholder in the FY 2627 budget due to the presumed correction for over refunds that this bill would effectuate so that would be I think the first order fiscal consequence of either not approving this bill or of of a court causing this bill to no longer be in effect.
Okay, Mr. Lively has a.
Thank you, Madam Chair. Senator Peltin, I think to echo what Chief Sebesky said, I think that a lot would depend on the timing of such a lawsuit because if that lawsuit were filed before there were any impact to the refunds for the next fiscal year, while the state may end up paying something like attorney's fees, there wouldn't be much of a consequence beyond that because that would be before the bill well and truly went into effect. Whereas if the lawsuit were filed after, say, the first year of a reduction in the tapered refund, that could potentially be up to the amount of that reduction, maybe 10% interest, depending on exactly when it's filed in attorney's fees. And then further, if it were filed after two years, so after presumably the full amount were reduced, then if the state were to lose, it could be that full amount plus some amount of interest and attorney fees. So much would depend not only on what the court would say in its decision, but also on when exactly
filed. Senator Bridges. Senator Kirkmeyer. So I'm assuming, and you can tell me if I'm incorrect, but I'm assuming that you're not trying to make a statement that there were mistakes made in
accounting when the books were closed for 24-25. Is that correct? Yeah. Senator Bridges. Thank you,
Madam Chair. What occurred with H.R. 1 was a retroactive change to Colorado's tax code because of how we adopt changes in federal, because of how the state automatically adopts any change in federal tax code. Because we are a state that bases our flat tax on sort of that last number that you fill out on your tax forms to the federal government. Really, almost all those changes, except for the ones that we explicitly choose not to adopt, are automatically incorporated. So there was a change to what it is that we should have given out in taper refunds.
Senator Krookmeyer. I understand all that, but my question was actually this. Do you believe that there was an accounting mistake made at the closing of our books, 24-25? Was there an accounting mistake?
Senator Bridges. Thank you, Madam Chair. I believe that we are settling up what it is that the appropriate amount of TABOR refunds should be according to existing law that makes those changes. Again, on page three of the fiscal note, because the bill was signed into law after the close of the state fiscal year, these impacts were not accounted for in 2425. As a result, the revenue loss associated with the OBHA HR1 for all of tax year 25 affects state revenue for 2526.
So you're still not really answering my question.
So it sounds like you don't believe that there was an accounting mistake made. Do you think that the refund wasn't certified in accordance with TABOR at the time, at the closing of our books? Do you believe that the refund wasn't in accordance with state statute? or with general accounting principles? Do you think there was an issue with the refund that was associated when we closed out the books in 24-25? Senator Bridges. Thank you, Madam Chair. I believe that under current law, the state reduces, again, referring to the fiscal note, the state reduces the amount of the next taper refund by the amount of the over-refund. I believe that's exactly what we're doing here in this bill.
So you believe that there was an over-refund when we closed out the books at that time? You don't think that the refund that was made and that was certified, that gave us a clean opinion on our books, that you believe it was certified and it wasn't in accordance with TABOR at the time, that it wasn't in accordance with state statute, and that it wasn't in accordance with general accounting principles? Is that what you're saying?
Senator Bridges. Thank you, Madam Chair. We had a revenue loss associated with H.R. 1 because of its retroactive nature. And so what this bill does is adjust TABOR refunds moving forward as we do under current law. The state reduces the amount of the next TABOR refund by the amount of the over-refund.
Okay, I'll let it go one more time, and then I think we'll move on.
Senator Kirkmeyer. This is the Committee of Reference. So this is the only opportunity for us to have a public hearing with regard to this bill. And it the only opportunity for me to really ask all of these questions Okay but I hear you asking the same question over and over again Well I don think that I not getting an answer to my question Well the answer that you just got is the only answer you going to get
I understand that.
So now I have another question. Okay, go ahead. Great. So if you believe that, if you're saying that our refund was not certified in accordance with Tabor, but now you're saying we need to change it because there was money that was revenue that was assumed that is not there because of something that happened after we closed our books, how are you not jeopardizing our clean opinion on our books? How is this not doing that?
Senator Bridges. Thank you, Madam Chair. The current law says the state reduces the amount of the next taper refund by the amount of the over-refund. That's what we do. This is a larger dollar amount than we've seen, but that is what we do.
Senator Kerkmeyer. Current law, statutes, taber, the constitution and general accounting principles said we closed our books and there was no over refund. So you're changing current law with this bill. And how are you not putting us at legal risk, but even more importantly, I mean that's important, but even more importantly jeopardizing our clean opinion on the books and putting us in a position of where it will make it harder for us to get bonding, it will make it harder for us to get financing, and it will also jeopardize the public's trust in government, not to mention everybody else's trust.
Well, I'll just say I think that the public understands that we had a situation that was forced on us by changes at the federal level that impacted what was happening in the year that we had just closed. And there was no way for us to know that at the time. Senator Bridges. Thank you, Madam Chair. I don't know that I would go that far. I would just say that I don't believe that we are doing any of those things, Senator Kirkmeyer. I appreciate your concern, but I just simply disagree. Senator Kirkmeyer.
There was no error to correct. There was no accounting mistake. Our books were closed. We got a clean opinion. So what potential legal risk do you think we're facing with this legislation? Do you have any ideas? Like what have you heard?
Senator Bridges. Thank you, Madam Chair. You sound pretty sure that there is legal risk here. I assume that – I mean, I can't imagine that there is not some kind of lawsuit, but I don't share your concern that we would lose that lawsuit. I do believe that this is in line with current statute and current practice, and I just – I simply don't share the concerns that you do over this bill. Mr. Vice Chair, I don't believe we moved L10. Did I not move L10? then I move L10. Did we? I did. Yeah, I thought I'd move both. All right. Okay. Are there objections to the adoption of L10? God. Testimony phase. Okay. Sorry. I forgot. We do have one person who's signed up to testify on this bill. I believe she's online. Ms. Meshke, are you there? I sorry I said your name wrong Ms Menton please unmute yourself Tell us your name and who you with and you have two minutes to testify We can't hear you. You need to unmute. Apologies, I should know that by now.
Yes, I am Ms. Menton, Natalie Menton. uh speaking in opposition to this bill and I am glad to hear the discussion that just occurred because uh that was largely what a focus of my comments were going to be and that is in the hustle and bustle that we have in the last few days of the legislative session uh there is not enough discussion on some of these matters including the bill before us 1419 which seeks to um I listened to the JBC meeting and my impression was that staff was recommending against this bill, both in a government to account for government accounting standards and both from a legal perspective. And if there's any correction on that, I would like to know. But that was the gist of what I've got from staff's recommendations on this. it reaches concerns about potential legal issues. We are asking to change the numbers around after there was a certified in accordance with TABOR statute and state accounting rules, which resulted in a clean opinion of the certification from the Office of State Auditor. And so this bill seeks to change that clean opinion. And I want to raise concerns that have been brought up very well here in the discussion. Thank you to Senator Kirkmeyer for a thorough set of questions, and I would hope maybe there's some more. But personally, I want to speak also to the fact that the statement was made by one of the members of the committee, the chair, that the public is aware of this. And in fact, no, I would state that most of the public is not aware of this. And if it was put to a vote as to whether basically the state could keep that money, I suspect the vote might be different from the public than would be what's going to come out from the vote on the bill based upon the membership. The public should be aware of it. And therefore, I'm against this. Thank you.
Committee members, any questions for the witness? Senator Pelton. Thank you, Madam Chair. Ms. Minton, thank you for being here today.
My question for you is, is we had some similar things happening in the lower South Platte there in Logan County and up in my district. Once the people found out about this, they were super angry. And then there was a lawsuit. Do you feel like we're going to have the same part here?
Ms. Minton.
Thank you. I believe there are similar issues to the Lower South Platte Water Conservancy District, which was increasing the mill without approval of the voters, without consent prior to the action. And in ways it's similar to what's occurring here. There is not voter consent. There is been a response, again, correct me if I'm wrong, where both legal and legislative staff have said there are concerns and they did not recommend the bill. This is partly why it didn't come out as a JBC bill is also my understanding and is why it's being now run separately. So I believe there are problems in the main core of what the taxpayers bill of rights is and that is consent of the taxpayers And I don believe that been is being given here Thank you
Okay. Any further questions for Ms. Minton? Did you have a question for the witness? Okay. I would like to finish the witness phase. Ms. Minton, thank you so much for your time and your testimony. Is there anyone else who would like to testify seeing no one the witness phase is closed? I do have a question. I have one question for Mr. Spetsky and one for Mr. Pierce. Okay. I'm closing out the witness phase now. The witness phase is closed. Senator Kirkmeyer.
Thank you. I would like, would you please ask our chief economist and our legal counsel to the table? Please, come forward. Thank you.
If I may, Madam Chair? Senator Kirkmeyer.
Thank you. So, Mr. Lively, the 2425 refund was certified in accordance with TABOR, with state statute and with state accounting within the state accounting rules and general accounting principles. There was no over-refund. There was no error. Could you discuss with us what you believe to be the potential legal risk associated with what we're doing here today in this bill?
Well, okay. Thank you, Madam Chair. I just want to be clear that that is an opinion that is being expressed by Senator Kirkmeyer, and I know that she believes it's fact, but it is a fact that is under, I think, disagreement. So I just want to be clear, like, that is a presumption of the question that I don't believe is accurate. And so I just want to make sure that is flagged as we move forward here. Okay. Mr. Lively.
Thank you, Madam Chair, Pierce Lively, Office of Legislative Legal Services. I am not an accountant and can't speak to with whether accounting standards were or were not followed here. I think that's probably best a question for the controller or the auditor. I can say that I and my office don't are not aware of what the legal basis is for making the change in this bill
Senator Kirkmeyer, thank you well then for our chief economist So it is a fact That the 2425 refund was certified in accordance with Tabor It was certified in accordance with state statute and followed state accounting rules And I'm assuming they're saying accounting rules are in line with general accounting principles So that is a fact, and there is a fact that it was not an overrefund for 24-25. I believe it is a fact that there was not an error to correct here. So could you, in your opinion, tell us if this jeopardizes our clean opinion? What other things that might be jeopardized with regard to making these kind of changes and trying to now say that because we learned after we closed the books that there was going to be less revenue in the previous year, year that now we're calling in an over refund when in fact all these things that already happened how would that affect our clean opinion how will that affect us cleaning closing out the books in 24 25 and also 25 26 mr. Zvezky
thank you madam chair thank you senator Kirkmeyer for the questions I'll do my
best to answer them I'll know the opinions on the audit for the annual comprehensive financial report are made by the office of the state auditor And I would encourage you to reach out to them and ask for their perspective on that because I think that they're the resource best equipped to opine on whether this changes the auditing that they will be doing with respect to the state's TABOR statements. There are two audits that are conducted there. One is with respect to the revenue certification that's released in September, and one's with respect to the schedule of computations that comes out with the ACFR in January each year. my understanding of House Bill 14 is that the bill does not affect the state's completed accounting for FY 2425. That is over and done with in the sense that the ACFR, which is the final accounting document that the state produces, has been published and has been audited already. And so my interpretation of this bill for fiscal purposes is that it doesn't change the accounting for that completed fiscal year. It has the potential consequence of changing the state's accounting for TABOR for FY2526. The reason for that is because of what has been explained to me as double entry accounting, where if there's a change to the FY2425 determination that an over-refund existed for that year, the consequence of that is that the auditor and the controller would interpret that as a statement that there was revenue that was accounted in FY 2425 that ought to have been accounted in FY 2526 you'll note that in the fiscal note for this bill there are an identification of administrative expenses for the auditor office and there an appropriation for that amount that was added in the House of Representatives The reason that the OSA has identified the need for additional costs associated with this is because it causes the state to need to conduct separate accounting between revenue collections, which is not affected by this bill, and the Tabor Schedule, where the state is not amending its FY24-25 revenue amounts, but is saying for the purposes of the TABOR schedule that there was an over-refund that occurred in that year and that requires downstream adjustments. So there's no downstream change to the year in which revenue is accounted. There is a downstream change to the years in which TABOR refund obligations are accounted. And so in that way, the bill creates sort of a persistent delinking between those two values. That doesn't, from my perspective as an economist, That doesn't necessarily raise any audit questions. Again, you'd need to ask the auditor about that. But it does administer the statute differently than it currently has been, which is why there's a need for those additional costs. And what I would perceive as the most significant fiscal impact of this bill in terms of going forward, breaking the relationship
that has otherwise existed between those two values Thank you Okay committee members any objection to the adoption of L Seeing none L is adopted Mr. Catlett, please poll the committee on the adoption of 1419 as amended.
Senators Gonzalez.
Aye.
Kirkmeyer.
No.
Coker.
Aye.
Liston.
No.
Pelton.
No.
Mr. Vice Chair.
Aye.
Madam Chair.
Aye.
That bill passes 4-3. Next up, we have House Bill 1423. Senator Bridges. Thank you, Madam Chair. I move House Bill 1423. This one is a JBC bill. Okay. And I've lost track. Is there an amendment with this?
No. No. There is no amendment.
Committee members, any questions about 1423? Seeing none, Mr. Catlett, please poll the committee on the adoption of House Bill 1423.
Senators Gonzalez.
Aye.
Kirkmeyer.
Aye.
Coker.
Aye.
Liston.
Aye.
Pelton.
Aye.
Mr. Vice Chair.
Aye.
Madam Chair.
Aye.
That bill passes unanimously. Mr Chair Mr Vice Chair Mr Whoever Senator whatever I suggest the consent calendar Any objections Seeing none that bill will be placed on the consent calendar The Senate Committee on Appropriations, only 45 minutes past when we were supposed to be done, is adjourned. See you all tomorrow. Thank you. Thank you.