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April 26, 2022 HB 22-1400
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0954
Rep. McCluskie; Tipper
Sen. Moreno
Date:
Bill Status:
Fiscal Analyst:
April 26, 2022
House Finance
Greg Sobetski | 303-866-4105
Greg.Sobetski@state.co.us
Bill Topic: HIGHER EDUCATION INSTITUTION ENTERPRISE STATUS
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill clarifies that higher education institutions that were previously qualified as state
enterprises do not require voter approval in order to requalify as enterprises. It
potentially decreases state expenditures and decreases state TABOR refunds on an
ongoing basis.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Summary of Legislation
The bill clarifies that certain higher education entities that were previously qualified as state
enterprises do not require voter approval in order to requalify as enterprises when they again satisfy
the applicable fiscal criteria. It applies to institutions of higher education and to auxiliary facilities
managed by an institution of higher education or the Auraria Higher Education Center.
Background
Enterprises. An enterprise is a government-owned business that is authorized to issue revenue bonds
and that receives less than 10 percent of its revenue from state and local government sources
combined. Revenue collected by programs designated as enterprises is not subject to the state’s
TABOR limit.
All state higher education institutions were designated as enterprises in 2004. Some of the smaller
institutions, including Adams State University, Fort Lewis College, and Western Colorado University,
are occasionally disqualified as enterprises when state contributions exceed 10 percent of their
revenue, often due to state-funded capital improvement projects. These institutions may requalify as
enterprises once state contributions again fall below 10 percent of their revenue. Page 2
April 26, 2022 HB 22-1400
When a program is disqualified as an enterprise, a corresponding upward adjustment is made to the
state TABOR limit. When a program requalifies as an enterprise, a corresponding downward
adjustment is made to the state TABOR limit.
Proposition 117. Proposition 117, approved by voters in 2020, requires voter approval for a state
enterprise to be qualified or created if its projected or actual revenue exceeds $100 million in its first
five fiscal years. The measure does not specifically address whether a previously qualified enterprise
requires voter approval in order to requalify as an enterprise.
Assumptions
It is unclear whether requalification of higher education entities as enterprises would require voter
approval under current law, and, if approval were required, whether a ballot measure would actually
be referred to voters. If voter approval is not required under current law, then the bill has no fiscal
impact. If voter approval is required under current law, then the bill potentially decreases state
expenditures and decreases state TABOR refunds, as discussed below.
State Expenditures
If the bill reduces the number of ballot measures referred to voters in the future, it will decrease
expenditures for the Department of State and the Legislative Department related to holding the
election, drafting the statewide voter guide (Blue Book), and related duties. The amount and timing
of the decrease are indeterminate because it depends on the number of ballot measures that would
otherwise be referred and when.
Other Budget Impacts
If the bill causes higher education entities to requalify as enterprises, it will reduce TABOR refunds to
taxpayers in some future years. Refunds will decrease in years when revenue to the higher education
entity grows faster than the combined rates of inflation and population growth.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State and Local Government Contacts
Higher Education
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.