BOARD00505

• Board Meeting Date: 1/12/1998
• Description: 1998 Legislative Issues - Declining Species Conservation Funding
• Board Meetings - Doc Type: Memo

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, hb r006.htm al www.state.co.us

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Omissions and Technical or Mechanical Defects

This bill requires the Department of Natural Resources to annually prepare a species conservation
list describing programs and associated costs that are eligible to receive funding. The bill also
requires the list to be subject to modification and adoption through passage of a joint resolution, The
bill creates the Species Conservation Trust Fund and states that monies in the fund are subject to
annual appropriation by the General Assembly. The bill requires the Executive Director of the
Department of Natural Resources to distribute the funding according to law. The bill then provides
an unspecified appropriation from the General Fund to the Species Conservation Trust Fund. This
language implies the Department of Natural Resources will be required to rely on annual funding
legislation to support anticipated, or planned, species conservation program expenditures.

The bill also requires, to the maximum extent practical, that only interest earned by the fund shall be
expended from the fund. This requirement, when associated with the requirements above, is unclear
whether the the legislative intent is to annually appropriate the amount of moneys to be annually
expended for the program, or to make a one-time appropriation of an amount sufficient to generate
investment earnings that will support annual program expenditures as explained in the following
alternatives.

State Expenditures - Alternatives

This bill limits, to the extent practical, the amount of annual Species Conservation Trust Fund
expenditures to the amount of interest earned by the moneys in the fund. The State Treasury
indicates the average annual rate of investment earnings is 6.0 percent. As a result, based upon the
expenditure estimates in Table 2, the principle of the fund would have to be maintained at
approximately $100 to 120 million to support an annual expenditure of approximately $6.0 to 7.2
million.

As a practical alternative, an initial Species Conservation Trust Fund principle of$45,584,012 would
be required for FY 1998-99, based upon the following assumptions:

that the Trust Fund annual rate of earnings will be 6.0 percent;

that the entirety of the annual investment earnings and a portion of the Trust Fund principle will be
annually expended;

that the Wildlife Cash Fund will continue to support annual expenditures at a level of $2,419,021;

that no grants or donations will be received;

that the annual Colorado and San Juan River expenditures of $1.0 million will commence in FY
1998-99 and will continue through FY 2006-07;

that the annual Platte River expenditures of$I,333,000 will commence in FY 2001-02 and will
continue through FY 2015-16;

that the annual capital expenditures for ~ther programs of $2, I 0 I ,200 (Table I) will commence in
FY 1998-99 and will continue through FY 2001-03;

that the annual operating expenditures for other programs of$5,169,480 (Table I) will commence in
FY 1998-99 and will continue through FY 2001-02;

that an amount of$IO,O million will remain available in the Trust Fund in FY 2002-03 for allocation
to other species programs in successive years; and

that the entirety of the Trust Fund principle will be depleted in FY 2015-16.

http://www.state.co.us/gov_dir/leg_dir/Ics/fnlfnote98/hbl006.htm

1/21/98