No.

James A. Stroup Deputy State Controller Department of Administration 1525 Sherman Street, Room 706 Denver, CO 80203

Dear Mr. Stroup:

I am writing in response to your memorandum of July 23, 1981 in which you request the opinion of this office whether the State Department of Highways may receive a temporary working capital loan from the state treasurer.

In preparing this response I have discussed the factual background for this loan request with John Mason in your office, Marcie Dill of the treasurer's office, and Janet Miller, the unit chief in this office who represents the Department of Highways.

QUESTION PRESENTED AND CONCLUSION

The specific question presented by your memorandum is whether the Department of Highways qualifies to receive a loan from the state treasurer to a "self-maintaining program" within the meaning of C.R.S. 1973, 24-75-203(1)(a) (Supp. 1980).

It is my opinion that the highway construction and maintenance program of the Department of Highways does qualify as a "self-maintaining program" within the meaning of that statute.

ANALYSIS

C.R.S. 1973, 24-75-203(1)(a) authorizes loans of state moneys under the following circumstances:

(1) (a) Upon the prior written approval of the governor and the controller as to purpose and amount, the state treasurer may lend the approved amount, out of any moneys in the state treasury not immediately required to be disbursed, to any department, institution, or agency to provide it with temporary working capital for the operation of business enterprises by institutions of higher education where primary purpose is not teaching or research and which are, or may be, in competition with private enterprise or any other self-maintaining program in other state agencies which generate their own revenues and which in the judgment of the state treasurer have the capacity to repay loans on the terms described in paragraph (b) of this subsection (1).

(Emphasis supplied.)

Loans pursuant to this statute are made for a period not to exceed 180 days, bear interest at an annual rate currently being charged by federal reserve banks on member bank borrowings and are to be repaid out of moneys subsequently received by the borrower from the self-maintaining program. C.R.S. 1973,24-75-203(1)(b) (Supp. 1980).

The Department of Highways expends moneys for the construction and maintenance of highways and related activities. The sources of its expenditures are federal funds and the Highway Users Tax Fund. The Department of Highways does not expend General Fund moneys for these purposes. Unlike the accounts of most state agencies, Department of Highways accounts with the state treasury are paid the interest earned by those moneys while on deposit in the treasury.

At certain times of the year, the Department of Highways may have to make expenditures for certain highway construction and maintenance programs prior to receiving federal moneys or revenues from the Highway Users Tax Fund. The department has recently made application to the state controller and state treasurer for a loan of $20 million so that it will not overdraw its accounts. The department anticipates that the loan will be repaid from federal highway moneys, however if those federal moneys were to become unavailable, the loan could be repaid from moneys received from the Highway Users Tax Fund.

Under these circumstances, it is my opinion that the highway construction and maintenance program of the Department of Highways and related activities is a "self-maintaining program" within the meaning of C.R.S. 1973, 24-75-203(1)(a) (Supp. 1980). The Highway Users Tax Fund consists of revenue derived from users of the public highways, not from the general revenues of the state, and is appropriated solely for purposes related to the construction and maintenance of public highways. C.R.S. 1973,43-4-203 and 43-4-204; see also Colo. Const. art. X, § 18. The state share of moneys in the Highway Users Tax Fund is apportioned to the State Highway Fund monthly. C.R.S. 1973,43-4-205 and 43-4-206.

The fact that the Department of Highways has an alternative source for repayment of this loan from federal moneys does not alter the fact that the highway construction and maintenance program is self-maintaining even if those federal moneys were not available. Since the Department of Highways accounts earn interest from the state treasurer, it is equitable that the department should pay interest on moneys loaned to it by the State General Fund. Of course, a loan made by the treasurer pursuant to C.R.S. 1973, 24-75-203(1)(a) (Supp. 1980) is subject to prior written approval by the Governor and state controller and must meet the requirements of subsection (1)(b) of that statute as well.

SUMMARY

In conclusion, it is my opinion that the highway construction and maintenance program of the State Department of Highways does satisfy the requirement of a "self-maintaining program" eligible for a loan from the state treasurer within the meaning of C.R.S. 1973, 24-75-203(1)(a) (Supp. 1980). This opinion is based on the facts as described in this letter and may change if that description is inaccurate. If you have additional questions in this matter, please do not hesitate to contact this office.

Very truly yours,

J.D. MacFARLANE Attorney General

cc: State Treasurer Department of Highways

PUBLIC FUNDS LOANS HIGHWAYS

C.R.S. 1973, 24-75-203(1)(a) C.R.S. 1973, 43-4-203 C.R.S. 1973, 43-4-204 C.R.S. 1973, 43-4-205 C.R.S. 1973, 43-4-206

Colo. Const. art. X, § 18

ADMINISTRATION, DEPT. OF Accounts Control Div. of TREASURY, DEPT. OF HIGHWAYS, DEPT. OF Highways, Div. of

The highway construction and maintenance program of the State Department of Highways is a "self-maintaining program" eligible for a loan from the state treasurer.