Temporarily Reduce General Fund Reserve

Plain English Breakdown

The effective date for certain calculations depends on an external condition in section 10-16-1209(1) occurring by January 1, 2026.

Temporary Reduction of the General Fund Reserve Requirement

This law temporarily lowers Colorado's required general fund reserve rate from 15% to 13% for fiscal years 2025-26 and 2026-27 before raising it back to 15% starting in fiscal year 2027-28.

What This Bill Does

• Lowers the required state budget reserve rate to 13 percent for fiscal years 2025-26 and 2026-27.
• Raises the required reserve rate back to 15 percent starting in fiscal year 2027-28.
• Allows a deduction of $41,250,000 from the reserve calculation for fiscal years 2027-28 and later if escrow money related to the University of Northern Colorado's College of Osteopathic Medicine has not been released.

Who It Names or Affects

• The State Treasurer, who calculates specific amounts used in determining the required reserve.
• State agencies that manage general fund appropriations and expenditures.

Terms To Know

General Fund Reserve

Money the state must keep as a savings balance instead of spending, calculated based on its total budget for the year.

Escrow Money

Funds held in an account connected to the University of Northern Colorado's College of Osteopathic Medicine that may be released or kept depending on specific conditions.

Limits and Unknowns

• The $41,250,000 deduction for escrow money only applies starting in fiscal year 2027-28 and later.
• Whether the State Treasurer must calculate amounts related to insurance premium sales depends on a specific condition occurring by January 1, 2026.

Official Summary Text

Under current law, the general fund reserve requirement is equal to 15% of the amount appropriated for expenditure from the general fund for that fiscal year minus:
The difference between $100,000,000 and the proceeds of the sale of insurance premium and corporate tax credits that are credited to the health insurance affordability cash fund; and
Unless money held in an escrow account in connection with the university of northern Colorado's college of osteopathic medicine is released, an additional $41,250,000.
The act lowers the reserve requirement to 13% for state fiscal years 2025-26 and 2026-27 and then raises it back to 15% for state fiscal years 2027-28 and later.
(Note: This summary applies to this bill as enacted.)

Current Bill Text

HOUSE BILL 26-1363
BY REPRESENTATIVE(S) Brown and Sirota, Taggart, McCluskie;
also SENATOR(S) Amabile and Bridges, Kirkmeyer, Ball, Kolker.
CONCERNING A TEMPORARY REDUCTION IN THE GENERAL FUND RESERVE.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, 24-75-201.1, amend
(l)(d)(XXVII) introductory portion and (l)(d)(XXVIl)(A); and add
(l)(d)(XXVIII) as follows:
24-75-201.1. Restriction on state appropriations - legislative
declaration -definitions.
(1) (d) For each fiscal year, unrestricted general fund year-end
balances must be retained as a reserve in the following amounts:
(XXVII) For the fiscal year 2025-26 and eaeh fiscal year thereafter,
fifteen THE FISCAL YEAR 2026-27, THIRTEEN percent of the amount
appropriated for expenditure from the general fund for that fiscal year
mmus:
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act.
(A) The amount calculated by the state treasurer in accordance with
section 10-16-1206 (1.S)(a)(Il)(B); except that this subsection
( 1 )(d)(XXVII)(A) takes effect on January 1, 2026, only if the condition
specified in section 10-16-1209 (1) occurs, and
(XXVIII) FOR THE FISCAL YEAR2027-28, AND EACH OF THE FISCAL
YEARS THEREAFTER, FIFTEEN PERCENT OF THE AMOUNT APPROPRIATED FOR
EXPENDITURE FROM THE GENERAL FUND FOR THAT FISCAL YEAR MINUS:
(A) THE AMOUNT CALCULATED BY THE STATE TREASURER IN
ACCORDANCE WITH SECTION 10-16-1206 (1.5)(a)(Il)(B); AND
(B) So LONG AS THE ESCROW MONEY IS NOT RELEASED AS SET FORTH
IN SECTION 23-40-107, FORTY-ONE MILLION TWO HUNDRED FIFTY THOUSAND
DOLLARS. AS USED IN THIS SUBSECTION (l)(d)(XXVIII)(B), "ESCROW
MONEY" HAS THE MEANING SET FORTH IN SECTION 23-40-107 (2)(c).
SECTION · 2. Safety clause. The general assembly finds,
determines, and declares that this act is necessary for the immediate
preservation of the public peace, health, or safety or for appropriations for
PAGE 2-HOUSE BILL 26-1363
the support and maintenance of the departments of the state and state
institutions.
Ju~ ~
SPEAKER OF THE HOUSE
OF REPRESENTATIVES
v~ ~
Vanessa Reilly
CHIEF CLERK OF THE HOUSE
OF REPRESENTATIVES
James Rashad Coleman, Sr.
PRESIDENT OF
THE SENATE
Esther van Mourik
SECRETARY OF
THE SENATE
APPROVED ""'-\h ur:,ol SJ. 'j' V\-.JL "f-l'h -z.t:f2.L,, .._,_f l Z; >°r",
(Da e and Time)
PAGE 3-HOUSE BILL 26-1363