Amendment 78 – Require Legislative Authority for Spending State Custodial Money

Custodial money is state revenue which originates from outside of state government and which has a designated purpose. The relevant state agency, public college or universities, or elected official spends custodial money. Examples of types of custodial money include federal emergency relief funds, legal settlements, most transportation funding (due to a quirk in the law), grants and donations.

Amendment 78 would add three words (noted with capitalization) to article V, section 33 of the state constitution: No moneys in the state treasury, NOR CUSTODIAL MONEYS, shall be disbursed … except upon appropriations made by law.” Amendment 78 requires 55% support from the electorate for this constitutional change to take effect.

The part of Colorado Revised Statutes section 24-31-108 that details how custodial money is currently handled would be deleted. Parts 3(d)(e)(f) and (g) would be added to CRS 24-75-201 to set up a new process for handling custodial funds. The proposed process entails setting up a Custodial Funds Transparency Fund and requiring the legislature to appropriate the funds “in a public hearing with the opportunity for public comment.” “Earnings and revenue from the Custodial Funds Transparency Fund shall revert to the General Fund.”

Currently custodial money is “not subject to annual appropriation by the General Assembly,” but state law requires that the expenditure directions be delivered both to the treasurer and to the legislature’s Joint Budget Committee. Money may “be expended only for the purposes for which the money has been provided.”

Because the legislature meets from January to May and the state receives custodial money all year long, expenditure of custodial money could face delays when the legislature is not in session. Special sessions are rare, but might not be if Amendment 78 passes.

A lawsuit against Amendment 78’s registered agents and the Secretary of State claims that Amendment 78 is not a TABOR question. Only TABOR questions are allowed on the state ballot in odd years. Ballots are printed, but if the lawsuit is successful, then all votes cast on this measure would be invalidated.

Recommendation: NO/AGAINST

Because custodial money has a designated purpose already, requiring a public hearing just mucks up the works with little benefit. Within the constraint of the specific designated purpose, e.g., pandemic relief, the legislature could make different decisions on how to spend the money than a state agency or elected official, but holding a governor or head of a state agency accountable is easier than holding a legislature accountable.

The proponents of this amendment take issue with how Gov Polis allocated some federal stimulus money during the COVID pandemic.

If the purpose of Amendment 78 is transparency, then the backers could have proposed a statutory change (requiring only a majority of CO voters to pass) to require that the Department of the Treasury’s “accounting of how custodial money has been or will be expended” be in the annual general appropriation act.

Website for the Yes side – Committee for Spending Transparency
No known website – Info on a proponents’ website appreciated.

Website for the No side
No known website – Info on an opponents’ website appreciated.


Approved Ballot Language
Amendment 78 ((Constitutional)

Shall there be an amendment to the Colorado Constitution and a change to the Colorado Revised Statutes concerning money that the state receives, and, in connection therewith, requiring all money received by the state, including money provided to the state for a particular purpose, known as custodial money, to be subject to appropriation by the general assembly after a public hearing; repealing the authority to disburse money from the state treasury by any other means; requiring all custodial money to be deposited into the newly created custodial funds transparency fund and the earnings on those deposits to be transferred to the general fund; and allowing the state to retain and spend all custodial money and earnings and revenue on that custodial money as a voter-approved revenue change?

YES/FOR ____
NO/AGAINST ____

Amendment 78 initiative language filed with the Secretary of State
https://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2021-2022/19Final.pdf