C.R.S. § 24-77-103.7: Over-refunds of state revenues - definitions.

(1) For purposes of this section, "over-refund" means a refund of state revenues that occurs when, through one or more mechanisms utilized pursuant to law to refund state revenues in excess of the limitation on state fiscal year spending for any given fiscal year, the amount of state revenues actually refunded during any given fiscal year exceeds the amount of state revenues in excess of the limitation on state fiscal year spending for the immediately preceding fiscal year required to be refunded without making any calculations or reductions as otherwise provided in this section.

(2) The amount of any over-refunds actually made in a fiscal year commencing on or after July 1, 2001, that have not been used to reduce the amount of state revenues in excess of the limitation on state fiscal year spending for said fiscal year in accordance with the provisions of this section shall be carried forward as a reduction of subsequent fiscal years' state revenues in excess of the limitation on state fiscal year spending and shall be applied first to the earliest fiscal years possible.

(3) For the fiscal year commencing on July 1, 2004, the controller shall:

(a) Calculate state fiscal year spending for the fiscal year in accordance with the provisions of section 24-77-103 without making any reduction in state fiscal year spending for the amount of over-refunds actually made in said fiscal year or for the amount of any over-refunds made in the fiscal years commencing on or after July 1, 2001, but prior to July 1, 2004, that have been carried forward to said fiscal year in accordance with subsection (2) of this section; and

(b) Reduce the sum of the amount of state revenues in excess of the limitation on state fiscal year spending for said fiscal year and the amount of any unrefunded state revenues in excess of the limitation on state fiscal year spending for the fiscal years commencing on or after July 1, 2001, but prior to July 1, 2004, that have been carried forward to said fiscal year in accordance with section 24-77-103.8 (3) by an amount equal to the sum of the amount of over-refunds actually made in said fiscal year and the amount of any over-refunds made in the fiscal years commencing on or after July 1, 2001, but prior to July 1, 2004, that have been carried forward to said fiscal year in accordance with subsection (2) of this section; however, the amount of said reduction shall not exceed the amount of state revenues in excess of the limitation on state fiscal year spending for said fiscal year.

(4) For fiscal years commencing on or after July 1, 2005, the controller shall:

(a) Calculate state fiscal year spending for the fiscal year in accordance with the provisions of section 24-77-103 without making any reduction in state fiscal year spending for the amount of over-refunds actually made in said fiscal year or for the amount of any over-refunds made in previous fiscal years that have been carried forward to said fiscal year in accordance with subsection (2) of this section; and

(b) Reduce the sum of the amount of state revenues in excess of the limitation on state fiscal year spending for the fiscal year and the amount of any unrefunded state revenues in excess of the limitation on state fiscal year spending for previous fiscal years that have been carried forward to said fiscal year in accordance with section 24-77-103.8 (3) by an amount equal to the sum of the amount of over-refunds actually made in said fiscal year and the amount of any over-refunds made in previous fiscal years that have been carried forward to said fiscal year in accordance with subsection (2) of this section; however, the amount of said reduction shall not exceed the amount of state revenues in excess of the limitation on state fiscal year spending for said fiscal year.

(4.5) If in September 2026 the controller certifies pursuant to section 24-77-106.5 (1) that state fiscal year 2025-26 state revenues did not exceed the limitation on state fiscal year spending imposed by section 20 (7)(a) of article X of the state constitution for state fiscal year 2025-26:

(a) Before November 16, 2026, the controller shall determine an amount equal to the difference between:

(I) The amount that the state is required to refund pursuant to section 20 (7)(d) of article X of the state constitution for state fiscal year 2024-25, as certified in the annual comprehensive financial report of the state that the state controller published for state fiscal year 2024-25; and

(II) The amount that the state would have been required to refund pursuant to section 20 (7)(d) of article X of the state constitution for state fiscal year 2024-25 as a result of the reduction of state revenues for state fiscal year 2024-25 caused by H.R. 1 of the 119th Congress (2025-26), Pub. L. 119-21, as determined by the controller, the office of state planning and budgeting, and the department of revenue.

(b) For purposes of the calculation set forth in subsection (4) of this section and section 24-77-103.5 (2), the amount of the over-refund for the fiscal year commencing on July 1, 2024, that is used for the reduction set forth in subsection (4)(b) of this section is equal to the amount determined by the controller in accordance with subsection (4.5)(a) of this section and, notwithstanding subsection (2) of this section, shall only be used for fiscal years commencing on or after July 1, 2026, and shall not exceed one-half of the amount calculated in accordance with subsection (4.5)(a) of this section for any fiscal year.

(5) All calculations and reductions made by the controller pursuant to this section shall be subject to review by the state auditor.