Opinion ID: 2572575
Heading Depth: 2
Heading Rank: 2

Heading: The Definition of Custodial Moneys

Text: We next address Interrogatory Number One, turning our attention to the portion of House Bill 04-1098 which defines custodial moneys. The language used to define custodial moneys essentially relies on various factors discussed in our case law, providing four basic elements which, together, constitute custodial moneys: (1) the funds originate from outside of Colorado; (2) the funds are provided for a particular purpose or program; (3) the funds contain restrictions or defined standards for their use or otherwise require approval for their use from a non-state entity; and (4) the funds are to be held by the state in a custodial capacity in order for the state to carry out the funds' designated purpose. H.B. 04-1098 at § (3)(a). Today we have been asked to decide whether this definition comports with the Colorado constitution as well as our case law construing the relevant constitutional provisions. We find that the definition of custodial moneys included in House Bill 04-1098 comports with constitutional principles insofar as it simply codifies some of those factors which we have already held to be relevant in determining whether particular moneys are custodial funds. See, e.g., Lamm I, 700 P.2d at 524 (defining custodial funds as funds not generated by tax revenues which are given to the state for particular purposes and of which the state is a custodian or trustee to carry out the purposes for which the sums have been provided). However, we do not recognize the definition at issue today as an exhaustive list of factors which must be considered when evaluating whether funds are custodial. See note 4, supra. Rather, all grants of money to Colorado must be considered on a case-by-case basis, with due regard being given to all the circumstances surrounding the allocation, including, but not limited to, those factors listed in House Bill 04-1098 at section (3)(a). Given that the nature of federal grants has been a constantly evolving process which has always required us to evaluate each grant individually, and without knowing how future grants will be disbursed, we are unable to answer the first interrogatory with any degree of certainty. See Lamm III, 738 P.2d at 1159 (analyzing the nature of federal revenue sharing, categorical grant, and block grant programs). Thus, we decline to answer the first interrogatory.