(1) The general assembly finds and declares that: (a) The accreditation body for the college of osteopathic medicine of the university of northern Colorado requires that the university deposit money into an escrow account to be held and released only upon either the: (I) Failure of the college to complete accreditation; or (II) Graduation of the first cohort from the college; (b) Money for the escrow is from a transfer of general fund money to the university in the amount required by the accreditation body; (c) In connection with the transfer of money from the general fund to satisfy the accreditation body's escrow requirements, there is a temporary reduction in the state's cash reserve set forth in section 24-75-201.1, which is a strategic investment of a small portion of the required statutory reserve in the general fund to reduce costs of the university required for accreditation of the college while ensuring that the state maximizes the benefit of the historic and important levels maintained as reserves in the general fund; (d) During the period that the money is held in escrow, the transaction of general fund money is a non-exchange transaction with a long-term time component that constitutes deferred outflow of resources by the state and deferred inflow of resources by the university, the principal of which is not recognized as revenue or expense until recognition of the money when it is released from escrow; (e) If the money, including any earned interest, is released from escrow upon the graduation of the first cohort from the college, the university intends to retain the money and the general assembly intends to reduce all or a portion of the total state appropriation to the university for the fiscal year in which the money is released from escrow, and for subsequent fiscal years as needed, by an equivalent amount; and (f) The retention by the university of northern Colorado of the money released from escrow is not intended to affect or in any way modify or otherwise impact the higher education funding allocation model established in article 18 of this title 23. (2) As used in this section, unless the context otherwise requires: (a) "College" means the college of osteopathic medicine of the university. (b) "Escrow account" means the account established and governed by an escrow agreement that is entered into between an escrow agent, the accrediting body for the college, and the university to receive and hold the escrow money. (c) "Escrow money" means the money that is deposited and held in the escrow account and released to the university upon either the failure of the college to complete accreditation or the graduation of the first cohort from the college, including any earned interest or investment income. (d) "Fund" means the college of osteopathic medicine escrow money cash fund created in subsection (3)(a) of this section. (e) "University" means the university of northern Colorado. (3) (a) The college of osteopathic medicine escrow money cash fund is created in the state treasury. The fund consists of money transferred to the fund pursuant to subsection (3)(b) of this section. (b) On or before June 30, 2024, the state treasurer shall transfer forty-one million two hundred fifty thousand dollars from the general fund to the fund. (c) Money in the fund is continuously appropriated to the university for the purpose of the university depositing the money into the escrow account to satisfy necessary costs in accordance with the accrediting body of the college's rules and regulations for operating reserve and escrow reserve requirements. (d) This subsection (3) is repealed, effective December 31, 2025. (4) If the escrow money is released to the university due to failure of the college to complete accreditation, the university shall provide a report to the joint budget committee of the general assembly, the state treasurer, and the office of state planning and budgeting within ten days of the release of the escrow money that sets forth the circumstances for the release of the escrow money and information concerning the use of the escrow money by the university as required by the accreditation body to pay operating and teach out costs of students of the college. (5) (a) Within ten days of receipt of notice from the accreditation body that the escrow money will be released to the university in accordance with the requirements and conditions of accreditation being met for the graduation of the first cohort of the college, the university shall provide notice of the same to the joint budget committee of the general assembly, the state treasurer, and the office of state planning and budgeting. (b) For the state fiscal year in which the escrow money will be released to the university for the reason set forth in subsection (5)(a) of this section, the amount to be paid to the university pursuant to the fee-for-service agreement negotiated pursuant to section 23-18-303.5 for that state fiscal year is reduced by the lesser of the amount of the escrow money or the amount of a portion of the escrow money that reduces the amount to be paid pursuant to the fee-for-service agreement to zero, and the university shall use the escrow money, or a portion of it, as applicable, to offset the reduction. (c) If there is escrow money remaining after the offset required by subsection (5)(b) of this section is made, then money that the university would otherwise receive from the college opportunity fund is reduced by the lesser of the amount of the remaining escrow money or the amount of a portion of the remaining escrow money that reduces the money the university would otherwise receive from the college opportunity fund to zero, and the university shall use the remaining escrow money, or a portion of it, as applicable, to offset the reduction. (d) If, after the offsets required by subsections (5)(b) and (5)(c) of this section, there remains any excess escrow money, then in the next state fiscal year, the amount to be paid to the university pursuant to the fee-for-service agreement negotiated pursuant to section 23-18-303.5 for that state fiscal year is reduced by the amount of any excess escrow money and the university shall use the remaining escrow money to offset the reduction.
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