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April 8, 2022 HB 22-1133
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated February 1, 2022)
Drafting Number:
Prime Sponsors:
LLS 22-0679
Rep. Gray; Caraveo
Sen. Winter
Date:
Bill Status:
Fiscal Analyst:
April 8, 2022
Senate Appropriations
Erin Reynolds | 303-866-4146
Erin.Reynolds@state.co.us
Bill Topic: FAMILY & MEDICAL LEAVE INSURANCE FUND
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Transfer
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill transfers $57.0 million from the Revenue Loss Restoration Cash Fund to the
Family and Medical Leave Insurance Fund to prepay state employer premiums to the
Department of Labor and Employment. It creates a one-time state transfer in
FY 2021-22, will reduce centrally appropriated costs for agencies by the same amount
over approximately four fiscal years, and will increase state revenue from interest
earnings.
Appropriation
Summary:
The Family and Medical Leave Insurance Fund is continuously appropriated to the
Department of Labor and Employment. Depending on timing of the bill's passage, the
bill may require an appropriation reduction from the Paid Family Medical Leave
Initiative line within each agency budget totaling $4.9 million in FY 2022-23.
Fiscal Note
Status:
The revised fiscal note reflects the reengrossed bill.
Table 1
State Fiscal Impacts Under HB 22-1133
Current Year
FY 2021-22
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue FAMLI Fund - $0.5 million $0.9 million
Total Revenue - $0.5 million $0.9 million
Expenditures Centrally Appropriated - ($4.9 million) ($9.8 million)
Total Expenditures - ($4.9 million) ($9.8 million)
Transfers Revenue Loss Restoration Cash Fund
1
($57.0 million) - -
FAMLI Fund $57.0 million - -
Net Transfer $0 - -
Other Budget - - -
1
Money in the Revenue Loss Restoration Cash Fund comes from federal ARPA funds. Page 2
April 8, 2022 HB 22-1133
Summary of Legislation
The bill transfers $57.0 million from the Revenue Loss Restoration Cash Fund to the Family and
Medical Leave Insurance Fund for advance payments into state employer accounts under the Paid
Family and Medical Leave Insurance Act administered by the Division of Family and Medical Leave
Insurance in the Colorado Department of Labor and Employment (CDLE). The credit for the advance
payments will include interest earnings.
When those accounts have a $0 balance, the state will begin paying quarterly premiums. The division
must report the manner in which it determines the state will receive credit for the advance payment
and interest earnings to the Department of Personnel and Administration, the Office of State Planning
and Budgeting, and the Joint Budget Committee by December 31, 2022. The bill specifies that advance
payments of premiums do not constitute indebtedness or a state liability and are exempt from the
state’s fiscal rules.
Background
The Family and Medical Leave Insurance Program, administered by the CDLE, was approved by
voters in November 2020 through citizen-initiated Proposition 118. The program was created as an
enterprise and its revenue does not count toward the state’s revenue limit under TABOR. It requires
employers and employees in Colorado to pay a payroll premium of 0.90 percent, with a minimum of
half paid by the employer, beginning January 1, 2023, in order to finance paid family and medical
leave insurance benefits. Premiums are capped at the Social Security Wage Base. Beginning
January 1, 2024, eligible employees may receive up to 12 weeks of paid family and medical leave
insurance benefits. Apart from a $1.5 million transfer from the General Fund to the Family and
Medical Leave Insurance Fund made through Senate 21-251, the program does not expect to receive
funding until January 1, 2023, when premiums collections begin. If House Bill 22-1305 is adopted, the
program will also receive up to $57.5 million General Fund to backfill a 0.90 percent premium
reduction for all employers from January 1, 2023, through June 30, 2023, through a transfer made on
July 1, 2023. For more information about the program, see: famli.colorado.gov.
State Revenue
The bill will increase state revenue from interest earnings by about $0.5 million in FY 2022-23
(half-year impact) and $0.9 million in FY 2023-24. This revenue is received in the Family and Medical
Leave Insurance Fund and credited toward the state’s prepayments of employee family and medical
leave premiums. Overall, the prepayment of $57 million is expected to generate about $3.4 million
over a six-year period while it is held in the fund and drawn down over time for premium payments.
It is assumed that interest earnings in this fund are not subject to the state’s TABOR revenue limit.
These estimates assume a 2.0 percent annual interest rate, compounded monthly, and quarterly
withdrawals from the prepayment amount for premium payments until the balance is exhausted.
Note that this fiscal note does not account for a corresponding reduction in interest earnings that may
be received by the Revenue Loss Restoration Cash Fund, as it is unknown if the $57 million would
otherwise be spent or held in that fund for some period of time.
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April 8, 2022 HB 22-1133
State Transfers
In the current FY 2021-22, the bill transfers $57.0 million from the Revenue Loss Restoration Cash
Fund to the Family and Medical Leave Insurance Fund.
State Expenditures
The advance payment of the state’s share of employer premiums will result in a reduction in state
expenditures of $4,908,466 in FY 2022-23 (half-year impact) and a reduction of $9,816,932 in
FY 2023-24, with ongoing reductions until the $57.0 million prepayment, plus interest earnings, is
drawn down. Based on the assumed interest earnings and holding premium payments constant, the
prepayment will fund about six years of premium payments. As discussed in the Background section,
these amounts represent the employer contribution of 0.45 percent of all appropriated positions
within the state, which are appropriated through the “Paid Family Medical Leave Initiative” line
within each agency budget.
Other Budget Impacts
The Family and Medical Leave Insurance Program is a state government enterprise, with revenue
exempt from TABOR. The fiscal note assumes that advance premium payments do not constitute
grant funding for purposes of determining the program's enterprise status.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
If this bill is passed after House Bill 22-1329, the FY 2022-23 Long Bill, it will requires a total reduction
of $4,908,466 in the centrally appropriated Paid Family Medical Leave Initiative line items, distributed
within each agency budget. If this bill is enacted prior to passage of the Long Bill, it is assumed that
the required adjustments in appropriations for this bill can be made as adjustments to the Long Bill,
rather than included as appropriations in this bill.
State and Local Government Contacts
Information Technology Labor and Employment
Personnel and Administration Treasury
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.