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July 13, 2022 HB 22-1083
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0548
Rep. Tipper; Rich
Sen. Winter; Simpson
Date:
Bill Status:
Fiscal Analyst:
July 13, 2022
Signed into Law
Louis Pino | 303-866-3556
louis.pino@state.co.us
Bill Topic: COLORADO HOMELESS CONTRIBUTION INCOME TAX CREDIT
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
This bill replaces and expands a state income tax credit for contributions to projects
meant to address homelessness. It reduces state revenue and increases state
expenditures from FY 2022-23 through FY 2030-31.
Appropriation
Summary:
For FY 2022-23, the bill includes an appropriation of $129,613 to the Division of
Housing in the Department of Local Affairs.
Fiscal Note
Status:
The fiscal note reflects the enacted bill.
Table 1
State Fiscal Impacts Under HB 22-1083
Budget Year
FY 2022-23
Out Year
FY 2023-24
Out Year
FY 2024-25
Out Year
FY 2025-26
Revenue General Fund ($2.6 million) ($6.1 million) ($7.5 million) ($8.4 million)
Total Revenue ($2.6 million) ($6.1 million) ($7.5 million) ($8.4 million)
Expenditures General Fund $129,613 $176,740 $143,522 $143,522
Centrally Appropriated $34,478 $51,034 $51,034 $51,034
Total Expenditures $164,091 $227,774 $194,556 $194,556
Total FTE 1.2 FTE 1.7 FTE 1.7FTE 1.7 FTE
Transfers - - - -
Other Budget
Impacts
TABOR Refund ($2.6 million) ($6.1 million) Not estimated Not estimated
General Fund Reserve $19,442 $26,511 $21,528 $21,528
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July 13, 2022 HB 22-1083
Summary of Legislation
Under current law, local enterprise administrators within the Office of Economic Development and
International Trade (OEDIT) enterprise zone (EZ) program manage a state income tax credit available
for taxpayers that make monetary or in-kind contributions to promote temporary, emergency, or
transitional housing programs for homeless persons in Colorado enterprise zones. This bill moves the
administration of the income tax credit to the Division of Housing (DOH) in the Department of Local
Affairs (DOLA), expands the credit allowed, and makes the credit available in the entire state.
Expanded tax credit. Under the bill, taxpayers who make a monetary or in-kind contribution to an
approved nonprofit organization or to an approved project administered by the nonprofit
organization are allowed a state income tax credit equal to 25 percent of the total value of the
contribution. In-kind contributions must be valued over $5,000 and monetary contributions must be
equal to or greater than $100. If the approved nonprofit organization or project is in an underserved,
rural county as defined by the Division of Housing, a taxpayer may claim a credit equal to 30 percent
of the total value of the contribution. The credit may be carried forward for up to five years, and is
available to individual and corporate taxpayers from 2023 through 2030.
The amount of income tax credits each approved nonprofit organization can issue per income tax year
is $750,000, while each approved project is capped at $750,000 per tax year.
Administration. The DOH is required to review and approve nonprofit organizations and projects
eligible to receive contributions. The DOH must post a list on their website of all the approved
nonprofit organizations and projects by November 1, 2022 and on or before each year thereafter.
Homeless programs previously approved by the Colorado Economic Development Commission are
eligible to receive contributions unless specifically rejected by the DOH.
An approved nonprofit organization is required to maintain an accounting system to track
contributions received by taxpayers. The DOH may specify what taxpayer information must be
reported and can request an audit or financial report from the nonprofit organization. The nonprofit
organization is also required to issue a tax credit certificate to each taxpayer that make an allowable
contribution.
Background
Existing income tax credit. Enterprise zone projects encourage community participation to revitalize
designated areas in the state. Under current law, donors may contribute to an enterprise zone project
that promotes temporary, emergency, or transitional housing programs for homeless persons and
claim 25 percent of a cash donation or 12.5 percent for an in-kind donation as an income tax credit.
Contributions are capped at $100,000 per tax year. The enterprise zone administrator may charge a
fee to organizations to oversee the program.
Data from the OEDIT estimates that 54 projects meant to promote eligible housing for the homeless
within Colorado enterprise zones received contributions in 2020, the most recent data available. Of
the 54 projects, approximately 14,178 taxpayers made a total of $21.7 million in contributions in 2020,
generating approximately $5.4 million in state income tax credits. The median contribution to these
projects was $400, with contributions ranging from $1 to $450,000. Page 3
July 13, 2022 HB 22-1083
The Office of the State Auditor (OSA) is required to evaluate all of the state’s tax expenditures at least
once every five years. The OSA published the enterprise zone contribution income tax credit
evaluation report on July 21, 2021. The OSA report evaluated all the income tax credits available
under Enterprise Zone Contribution program . The full report can be found here:
https://leg.colorado.gov/sites/default/files/2021_te16_enterprise_zone_contribution_credit.pdf. The
evaluation of the homeless contribution credit begins on page 27 of the report.
State Revenue and Assumptions
The bill is expected to reduce General Fund revenue by $2.6 million in FY 2022-23, $6.1 million in
FY 2023-24, $7.5 million in FY 2024-25, and by $8.4 million annually from FY 2025-26 through
FY 2030-31 when the credit is set to expire. The estimate for FY 2022-23 represents a half-year impact
on an accrual accounting basis. The bill reduces individual and corporate income tax revenue, which
is subject to TABOR.
These estimates are based on new contributions expected by making the income tax credit available
statewide. Estimates are net of the General Fund revenue reductions expected under current law for
the tax credit program administered by the OEDIT.
Data and assumptions. Revenue reductions under this bill are based on the following assumptions:
This fiscal note assumes approximately 11,300 new contributions will be given to an approved
nonprofit organization or program in 2023, an 80 percent increase from 2020. The amounts
contributed by these taxpayers will track the same distribution as those that contributed to an
EZ homeless project in 2020, adding approximately $5.3 million to current levels. Contributions
are expected to increase by another 15 percent in 2024 and continue to grow at a slower rate each
year the income tax credit is available, following patterns of other new income tax credits.
The fiscal note assumes most of the current homeless projects in an enterprise zone receiving
contributions will be approved by the DOH and will continue to receive contributions at the same
levels as the four-year average from 2017 through 2020 ($5.2 million).
Approximately 150 new nonprofit organizations and projects will seek approval to receive
contributions beginning in 2023. The DOH currently administers the Colorado Homelessness
Management Information System (COHMIS). COHMIS is a local syste m used to collect
client-level data on the provisions of housing and services to homeless individuals, families, and
persons at risk of homelessness. The U.S. Department of Housing and Urban Development
requires communities receiving federal funding to use COHMIS. As of January 2022,
approximately 134 nonprofit organizations manage about 600 programs that provide services to
those experiencing homelessness. It is important to note that COHMIS does not include all
homeless organizations and programs that may be eligible to seek approval from the DOH to
receive contributions under this bill. The number of approved nonprofit organizations and
projects is assumed to grow slightly each year as more organizations apply for the approval.
Finally, COHMIS does not contain capital projects that might be constructed to perform
operational campaigns or facilities that are used to provide administrative support for approved
projects and would be eligible for the income tax credit in the bill. Page 4
July 13, 2022 HB 22-1083
Estimates for the tax credit assume that all credits will reduce tax liability in the first year that they
are earned, rather than being carried forward to future tax years. To the extent that a taxpayers
income tax liability is less than the credit amount, the revenue impact of the bill will be partially
delayed into future fiscal years.
State Expenditures
The bill will increase General Fund expenditures by $164,091 and 1.2 FTE in FY 2022-23, by
$227,774 and 1.7 FTE in FY 2023-24, and by $194,556 and 1.7 FTE annually from FY 2024-25 through
FY 2030-31. These costs, which are incurred in the Department of Revenue and the Division of
Housing in DOLA, are summarized in Table 2 and described below.
Table 2
Expenditures Under HB 22-1083
Cost Components FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26
Department of Revenue
GenTax Programming and
Testing
- $33,218 - -
Office of Research and Analysis - $6,400 $6,400 $6,400
DOR Subtotal - $39,618 $6,400 $6,400
Department of Local Affairs
Personal Services $83,268 $126,072 $126,072 $126,072
Operating Expenses $1,080 $1,530 $1,530 $1,530
Capital Outlay Costs $12,400 - - -
Other Costs $32,865 $9,520 $9,520 $9,520
Centrally Appropriated Costs
1
$34,478 $51,034 $51,034 $51,034
FTE – Personal Services 1.2 FTE 1.7 FTE 1.7 FTE 1.7 FTE
Subtotal $164,091 $188,156 $188,156 $188,156
Total $164,091 $227,774 $194,556 $194,556
Total FTE 1.2 FTE 1.7 FTE 1.7 FTE 1.7 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
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July 13, 2022 HB 22-1083
Department of Revenue. This bill requires one-time costs in FY 2023-24 for development,
programming, and testing for the department's GenTax software system, which includes maintenance
and support of $6,750 for 30 hours at $225 per hour. The Systems Support Office will require $21,000
for development and testing. Business user acceptance testing is necessary to ensure the changes
made to the computer system work as intended, requiring $25.20 per hour for 200 hours for a one-time
cost of $5,040 in FY 2023-24. Finally, the bill requires changes to four income tax forms prepared by
the Department of Personnel and Administration. These changes are expected to cost $428 and this
funding is to be reappropriated to DPA.
The Office of Research and Analysis, located within the EDO, requires $6,400 in funding to map new
schedule data and fields, representing 200 hours of work at $32.00 per hour, in FY 2023-24 and future
years.
Department of Local Affairs, Division of Housing. The DOH will require $164,091and 1.2 FTE in
FY 2022-23 and $188,156 and 1.7 FTE annually from FY 2023-24 through FY 2030-31 to manage and
coordinate all aspects of the income tax credit program. FY 2022-23 includes hiring a Community and
Economic Development Coordinator to conduct the required stakeholder engagement and develop
program guidelines. FY 2022-23 also includes OIT costs to develop a database that will accept
applications and store all program evaluation data. The DOH expects the application portal will be
developed in Salesforce. Table 2 includes the cost of three Salesforce licenses. In addition, the DOH
will require a Program Assistant to coordinate and review applications.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated
with this bill are addressed through the annual budget process and centrally appropriated in the Long
Bill or supplemental appropriations bills, rather than in this bill. These costs, which include employee
insurance and supplemental employee retirement payments, are shown in Table 2.
Other Budget Impacts
TABOR refunds. The bill is expected to decrease the amount of state revenue required to be refunded
to taxpayers by the amounts shown in the State Revenue section above. This estimate assumes the
December 2021 LCS revenue forecast. A forecast of state revenue subject to TABOR is not available
beyond FY 2023-24. Because TABOR refunds are paid from the General Fund, decreased General
Fund revenue will lower the TABOR refund obligation, but result in no net change to the amount of
General Fund otherwise available to spend or save.
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve beginning in FY 2022-23. Based
on this fiscal note, the bill is expected to decrease the amount of General Fund held in reserve by
$19,442 in FY 2022-23 and $26,511 annually from FY 2023-24 to FY 2030-31, which will increase the
amount of General Fund available for other purposes.
Effective Date
The bill was signed into law by the Governor on May 31, 2022, and takes effect on August 9, 2022,
assuming no referendum petition is filed. Page 6
July 13, 2022 HB 22-1083
State Appropriations
For FY 2022-23, the bill includes a General Fund appropriation of $129,613 to the Department of Local
Affairs and 1.2 FTE.
State and Local Government Contacts
Information Technology Local Affairs OEDIT
Secretary of State State Auditor
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.