Page 1
April 26, 2022 SB 22-159
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 1, 2022)
Drafting Number:
Prime Sponsors:
LLS 22-0808
Sen. Bridges; Zenzinger
Rep. Ortiz; Will
Date:
Bill Status:
Fiscal Analyst:
April 26, 2022
House Finance
Elizabeth Ramey | 303-866-3522
Elizabeth.Ramey@state.co.us
Bill Topic: REVOLVING LOAN FUND INVEST AFFORDABLE HOUS ING
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill creates a revolving loan program to support affordable housing. It increases
state revenue and state expenditures, and may increase local expenditures beginning
in FY 2022-23.
Appropriation
Summary:
For FY 2022-23, the bill requires a reappropriation of $379,081 to the Office of
Information Technology. Funding for the Department of Local Affairs is continuously
appropriated from the Transformational Affordable Housing Revolving Loan Fund.
Fiscal Note
Status:
The fiscal note reflects the reengrossed bill.
Table 1
State Fiscal Impacts Under SB 22-159
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue Cash Funds $1.8 million $10.5 million
Total Revenue $1.8 million $10.6 million
Expenditures
Cash Fund $24.8 million $46.8 million
Centrally Appropriated $0.8 million $0.8 million
Total Expenditures $25.7 million $47.5 million
Total FTE 23.3 FTE 19.0 FTE
Transfers
Cash Fund
1
($150.0 million) -
Transformational Affordable Housing
Revolving Loan Fund
$150.0 million -
Net Transfer $0 -
Other Budget Impacts TABOR Refunds $0.3 million $1.5 million
1
Funding will be transferred from the Affordable Housing and Home Ownership Cash Fund, consisting of money that
originates in the General Fund. Page 2
April 26, 2022 SB 22-159
Summary of Legislation
The bill creates the Transformational Affordable Housing Revolving Loan Program in the Division of
Housing (DOH) in the Department of Local Affairs (DOLA) to provide flexible, low-interest, and
below-market-rate loan funding to make investments in transformational affordable housing.
Transformational Affordable Housing Revolving Loan Program. DOLA is required to establish
policies and processes for the revolving loan program, including eligibility requirements, loan
parameters, and reporting requirements. Eligible recipients include local governments, community
partners, for-profit developers, and political subdivisions of the state. Eligible projects are those that
support the development of infrastructure related to affordable housing development, new
construction of affordable housing, or the preservation of existing affordable housing, with priority
for projects located in communities impacted by the pandemic, facing barriers to accessing capital, or
that are otherwise underserved. DOLA may consult with the Colorado Energy Office in developing
criteria for energy efficient projects. DOLA is required to classify each county as “urban,” “rural,” or
“rural resort” by September 1, 2022.
The program must be developed with the goal of generating enough return to replenish the program
for future allocations. In addition, DOLA is required to work with the Minority Business Office, small
business development centers, community development financial institutions, and stakeholder
partners to develop and conduct a marketing initiative in the top spoken languages of targeted
communities, including underserved and rural communities. DOLA may administer the loan
program or may contract out full or partial administration using a competitive process.
Transformational Affordable Housing Revolving Loan Fund. The bill creates the Transformational
Affordable Housing Revolving Loan Fund and transfers $150 million to the fund on July 1, 2022. The
fund is continuously appropriated to DOLA, and up to 5 percent of the fund may be spent on
administration costs. The department may also seek and expend gifts, grants, and donations for the
program, credited to the fund.
Reporting. The bill requires DOLA to detail the use of the funds appropriated in this bill in its
mandatory annual report to the General Assembly.
Assumptions
This fiscal note assumes that $22.5 million in loans will be originated in FY 2022-23, starting
January 1, 2023, and $45.0 million in loans originated annually on July 1 in subsequent fiscal years, at
an interest rate of 2 percent, for an average term of 7 years. Origination fees are assumed to be
0.5 percent of loans deployed annually.
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April 26, 2022 SB 22-159
State Revenue
The bill is expected to increase state cash fund revenue from origination fees, loan repayment, and
interest by $1.8 million beginning in FY 2022-23, and by increasing amounts in future years, as shown
in Table 2. Actual loan repayment terms and amounts may differ from these estimates. Revenue from
repayment of the loan principal is not subject to TABOR; however, any earnings such as fees and
interest are subject to TABOR.
Table 2
State Revenue Impact of SB 22-159
FY 2022-23 FY 2023-24 FY 2024-25
Origination Fees $112,500 $225,000 $225,000
Principal Repayment $1,500,000 $9,100,000 $15,340,000
Interest Revenue $220,000 $1,240,000 $1,900,000
Total $1,832,500 $10,565,000 $17,465,000
The bill also potentially increases state revenue to the new Transformational Affordable Housing
Revolving Loan Fund from gifts, grants, or donations; however, no sources have been identified.
Gifts, grants, and donations are exempt from TABOR revenue limits.
State Transfers
In FY 2022-23, the bill transfers $150 million from the Affordable Housing and Home Ownership Cash
Fund, from money that originates in the General Fund, to the new Transformational Affordable
Housing Revolving Loan Fund.
State Expenditures
The bill increases state expenditures in DOLA and the Office of Information Technology (OIT) by
$25.7 million in FY 2022-23 and $47.5 million in FY 2023-24 from the Transformational Affordable
Housing Revolving Loan Fund. Expenditures are shown in Table 3 and detailed below. Expenditures
are assumed to continue in future years.
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April 26, 2022 SB 22-159
Table 3
Expenditures Under SB 22-159
Cost Components FY 2022-23 FY 2023-24
Department of Local Affairs
Personal Services $1,442,161 $1,485,427
Operating Expenses $54,111 $37,961
Capital Outlay Costs $126,564 $8,764
Loans $22,500,000 $45,000,000
Consultants and Data Purchases $250,000 $50,000
Software Licenses $88,269 $98,269
Centrally Appropriated Costs
1
$756,632 $769,868
FTE – Personal Services 19.0 FTE 19.0 FTE
DOLA Subtotal $25,217,737 $47,450,289
Office of Information Technology
Personal Services $348,476 -
Operating Expenses $5,805 -
Capital Outlay Costs $24,800 -
Centrally Appropriated Costs
1
$74,346 -
FTE – Personal Services 4.3 FTE -
OIT Subtotal $453,427 -
Total $25,671,164 $47,450,289
Total FTE 23.3 FTE 19.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Local Affairs. Costs will increase in the Division of Housing to establish the new loan
program, including setting loan policies, underwriting loans, reviewing applications, monitoring
loans, publicizing the program, and reporting on the program.
Administrative costs. Administrative costs in DOLA are estimated at $2.0 million and 19.0 FTE
beginning in FY 2022-23. Positions include asset managers, loan servicing specialists,
underwriters, a data manager, data analyst, policy analyst, ambassador, program assistant, and
program manager. Operating and capital outlay costs include standard costs for new staff, vehicle
mileage, and cell phone service. Specialized software licenses for loan management and the
purchase of data for county classification are also included. DOLA requires consultants to provide
technical assistance in integrating the loan program into an enterprise data warehouse to evaluate
and analyze the program. Administrative expenses are assumed to continue into future years.
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April 26, 2022 SB 22-159
Loans. The fiscal note assumes that $45.0 million in loans will be originated annually on a
permanent basis. The amount of money loaned each fiscal year will depend on the size and
number of loans made, as determined by DOLA. The first-year loan amount is prorated by half,
assuming the program begins issues loans mid-year.
Office of Information Technology. The office requires 4.3 FTE in FY 2022-23 only to modify existing
systems to support the loan programs. Costs have been estimated assuming that the same system
enhancements will also support the programs created by House Bill 22-1304 and Senate Bill 22-160,
resulting in some cost savings. The costs shown in Table 3 reflect one-third of the required costs for
all three bills; should either of those bills not pass, IT development costs for this bill may increase.
Standard operating and capital outlay costs are included. Costs are paid from the cash funds via a
reappropriation from DOLA.
Personnel. Workload in the Department of Personnel and Administration will increase for the
administration of the new cash fund created by the bill. The increased workload can be accomplished
within existing appropriations, however, the cost of all cash funds created may require additional
resources, which will be requested through the annual budget process.
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 3.
Other Budget Impacts
TABOR refunds. The bill is expected to increase the amount of state revenue required to be refunded
to taxpayers by $0.3 million in FY 2022-23 and $1.5 million in FY 2023-24 from interest payments and
loan origination fees. This estimate assumes the March 2022 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, increased cash fund revenue will reduce the amount of General Fund available to
spend or save.
Local Government
Local governments that receive loans under the bill will have an increase in administrative and
construction-related expenditures to use the loan revenue, and will be required to pay interest on any
loans received.
Technical Note
The bill limits administrative costs to five percent of money appropriated or transferred into or repaid
from the Transformational Affordable Housing Revolving Loan Fund. The fiscal note estimates that
administrative costs exceed this threshold after about 2.5 years, based on the initial allocation of funds.
Using five percent of revenue to the revolving fund from loan repayments for administration may add
additional time that DOLA remains within the threshold, but not indefinitely. Page 6
April 26, 2022 SB 22-159
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
The Transformational Affordable Housing Revolving Loan Fund is continuously appropriated to
DOLA, so no further appropriation is required.
For FY 2022-23, the bill requires a reappropriation of $379,081 from the Department of Local Affairs
to the Office of Information Technology, with 4.3 FTE.
State and Local Government Contacts
Colorado Energy Office Counties Information Technology
Local Affairs Municipalities Personnel
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.