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April 28, 2022 SB 22- 220
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 26, 2022)
Drafting Number:
Prime Sponsors:
LLS 22-0907
Sen. Hansen; Rankin
Date:
Bill Status:
Fiscal Analyst:
April 28, 2022
Senate Appropriations
Marc Carey | 303-866-4102
marc.carey@state.co.us
Bill Topic: PROPERTY TAX DEFERRAL PROGRAM
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
This bill relocates administration of the existing state property tax deferral program
from county governments to the State Treasury, and allows the Treasurer to contract
with a third party administrator to administer the program. It increases state
expenditures and impacts local government expenditures on an ongoing basis.
Appropriation
Summary:
For FY 2022-23, the bill requires a General Fund appropriation of $1,725,883 to the
Department of the Treasury.
Fiscal Note
Status:
The fiscal note reflects the introduced bill. It has been updated to reflect new
information.
Table 1
State Fiscal Impacts Under SB 22-220
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue
- -
Expenditures General Fund $1,725,883 $1,773,782
Transfers - -
Other Budget Impacts General Fund Reserve $258,882 $266,067
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April 28, 2022 SB 22- 220
Summary of Legislation
Current law includes a property tax deferral program for qualified property owners whose property
taxes grow above a certain threshold each year. Through the program, the state makes secured loans
to taxpayers to pay property taxes on the taxpayer’s homestead. In 2021, the General Assembly
statutorily required the Governor and State Treasurer to study the program, and potentially
recommend changes. This bill implements some of these recommendations.
The bill shifts administrative responsibilities for the program from county treasurers to the State
Treasurer, and specifies that the State Treasurer may:
conduct a public education campaign about the program;
contract with a third party to administer the program;
promulgate rules for program administration.
As part of the revised program, the bill requires:
taxpayers to file deferral claims with the State Treasurer;
the State Treasurer to issue and record the certificate of tax deferral with the appropriate county
clerk’s office;
the county treasurer to refund any overpayment on an account that has been deferred to person
that paid the taxes;
taxpayers to tender repayment of loans to the state treasurer; and
the State Treasurer to send updated deferral notices to taxpayers who have previously deferred
property taxes reflecting that State Treasurer’s new administrative role.
Finally, the bill creates an exception to the requirement that a loan becomes payable for a property
that becomes uninhabitable and loses its value as a result of natural causes, including fire, explosion,
flood, tornado, action of the elements, act of war or terror, or other causes beyond the control of the
property owner.
Background
Senate Bill 21-293. Beginning for 2022 property taxes, SB 21-293 expanded the existing property tax
deferral program by allowing homeowners to apply to apply for a deferral of a portion of their
property taxes if their property tax liability grows by more than 4.0 percent from the average liability
over the previous two years. At least $100 of any property tax increase exceeding 4.0 percent may be
deferred. Total deferrals across multiple years is limited to $10,000 for the property. To qualify,
homeowners must apply with their county treasurer by April 1 of the year when tax is due. That bill
also required the Governor’s Office and State Treasurer study the deferral program and recommend
changes to the General Assembly by January 1, 2022. CoreLogic was retained to conduct the required
study and produce the final report, submitted on December 30, 2021.
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April 28, 2022 SB 22- 220
CoreLogic Study Results. The CoreLogic study found the existing property tax deferral program had
very low utilization and was not scalable. Only 17 of 64 Colorado counties had homeowners utilizing
the program. The study recommended centralizing administration at the state level to scale the
existing program and expand eligibility. State level administration would create operational
efficiencies and promote participation.
Assumptions
This fiscal note assumes the property tax deferral program will be altered according the
recommendations from the CoreLogic study. Although the State Treasurer will contract with a third
party administrator, personnel costs are estimated using the State of Colorado 2022 salary schedule.
State Expenditures
The bill increases state expenditures in Department of the Treasury by $1,725,883 in FY 2022-23 and
$1,773,782 in FY 2023-24 from the General Fund to contract with a third party administrator to
administer the expanded program. Expenditures are shown in Table 2 and detailed below.
Table 2
Expenditures Under SB 22-220
FY 2022-23 FY 2023-24
Dept. of Treasury - Third Party Administrator
Personal Services (16.0 FTE) $788,184 $859,838
Operating Expenses and Indirect Costs $937,699 $913,944
Total Cost $1,725,883 $1,773,782
Third party administrator costs. Estimated personnel costs associated with program administration
include salaries and benefits for a program manager, office manager, ten customer service specialists,
two property tax specialists and two accountants. Salaries were estimated using the Colorado State
Employee 2022 salary schedule, and have been adjusted in the first year to account for the pay date
shift. The third party administrator will also require standard operating expenditures, $600,000 per
year to market the program, and about $55,000 in FY 2023-24 and thereafter to develop and operate
an online portal for program participants.
Other Budget Impacts
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 increase the amount of General Fund held in reserve by the
amounts in Table 1, which will decrease the amount of General Fund available for other purposes.
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April 28, 2022 SB 22- 220
Local Government
Participation in property tax deferral. Centralization of the property tax deferral program is assumed
to increase participation in the program. This would increase property tax deferrals and reduce local
government property tax revenue in current years by the amount that was deferred to future years.
The amount of the increased deferrals has not been estimated.
County Treasurers. County treasurers will see reduced workload as they will no longer have to
administer the existing property tax deferral program for seniors and disabled veterans. However,
they will have an increase in workload as they will have to work with the third party administrator to
market the expanded program and include information on taxpayer’s property tax bill. The net
workload impact for county treasurers is expected to be minimal.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
In FY 2022-23, the bill requires a General Fund appropriation to the Department of the Treasury of
$1,725,883.
State and Local Government Contacts
Governor’s Office State Treasurer County Treasurers
Counties County Assessors
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.