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February 22, 2022 HB 22-1228
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0324
Rep. Roberts; Bockenfeld
Date:
Bill Status:
Fiscal Analyst:
February 22, 2022
House Judiciary
Annie Scott | 303-866-5851
Annie.Scott@state.co.us
Bill Topic: SUNSET CONTINUE REGULATE PRENEED FUNERAL CONTRACTS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
Sunset Bill. This bill continues the regulation of preneed funeral contracts in the
Department of Regulatory Agencies, which is scheduled to repeal on
September 1, 2022. State fiscal impacts include a possible increase in revenue and
expenditures from changes to the program under the bill, and the continuation of the
program's current revenue and expenditures. The program is continued through
September 1, 2029.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 22-1228
1
New Impacts
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue Cash Funds - -
Expenditures Cash Funds - -
New FTE - -
Other Budget Impacts
- -
Continuing Impacts
Revenue Cash Funds - $52,200
Expenditures Cash Funds - $19,732
Continuing FTE - 0.3 FTE
1
Table 1 shows the new impacts resulting from changes to the program under the bill and the continuing impacts
from extending the program beyond its current repeal date. The continuing program impacts will end if the bill is
not passed and the program is allowed to repeal. Page 2
February 22, 2022 HB 22-1228
Summary of Legislation
The regulation of preneed funeral contacts by the Division of Insurance in the Department of
Regulatory Agencies (DORA) is scheduled to repeal on September 1, 2022. This bill continues the
regulation until September 1, 2029, and implements recommendations in the 2021 Sunset Review. The
bill makes several changes to the program, including:
directing the Commissioner of Insurance (commissioner) to set net worth and bond requirements
in rule;
allowing the commissioner to investigate records of the seller;
requiring that fees be set by the commissioner based on the cost of regulating the industry;
requiring that unused funds be transferred to the Unclaimed Property Trust Fund; and
requiring that funeral establishments attest as to whether they sell preneed contracts.
Background
Preneed funeral contracts are agreements where individuals prepay for funeral goods and services.
The contracts can be backed by a trust or a life insurance policy. Contracts are sold by funeral homes,
brokers, or life insurance agents. Applicants for licensure pay a $500 licensing fee, show proof of their
net worth or post a surety bond, and complete a fingerprint-based criminal history background check.
Renewal fees range from $100 to $2,000 based on the aggregate preneed contract price outstanding.
As of December 31, 2020, there were 68 licensees representing a total amount of outstanding preneed
contracts of $246,535,326.
To review the 2021 Sunset Review, see:
https://drive.google.com/file/d/1t55Rc1eUWaFHC-d1VLcW6sxXC-PaxvW_/view
Continuing Program Impacts
Based on the 2021 Sunset Review of Preneed Funeral Contracts, DORA is expected to have annual
revenue of $52,200 and expenditures of $19,732 to administer the preneed funeral contracts program.
If this bill is enacted, current revenue and expenditures will continue for the program starting in
FY 2023-24. This continuing revenue is subject to the state TABOR limits. If this bill is not enacted,
the program will end on September 1, 2023, following a wind-down period, and state revenue and
expenditures will decrease starting in FY 2023-24 by the amounts shown in Table 1. The impact from
the changes to the program are discussed in the State Revenue and Expenditures section below.
State Revenue and Expenditures
Although the bill allows the commissioner to set fees, no fee increase has been estimated. The bill may
increase funds sent to the Unclaimed Property Trust Fund. The bill will increase workload in DORA
related to rulemaking, investigations and administration, but this is not expected to require additional
appropriations.
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February 22, 2022 HB 22-1228
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State and Local Government Contacts
Information Technology Regulatory Agencies 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.