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February 23, 2023 SB 23-161
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0819
Sen. Fenberg; Will
Rep. Lynch; McCluskie
Date:
Bill Status:
Fiscal Analyst:
February 23, 2023
Senate Finance
Josh Abram | 303-866-3561
josh.abram@coleg.gov
Bill Topic: FINANCING TO PURCHASE FIREFIGHTING AIRCRAFT
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill requires the state treasurer to finance the purchase of a Blackhawk firefighting
helicopter. The bill increases state expenditures by up to $4 million annually for up to
20 years. The bill also increase state revenue from issuance of a lease-purchase
agreement.
Appropriation
Summary:
No appropriation is required. See State Appropriations Section.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under SB 23-161
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue Cash Funds $26.0 million -
Total Revenue $26.0 million -
Expenditures
General Fund up to $4.0 million up to $4.0 million
Cash Funds $26.0 million -
Total Expenditures up to $30.0 million up to $4.0 million
Transfers - -
Other Budget Impacts General Fund Reserve up to $600,000 up to $600,000
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February 23, 2023 SB 23-161
Summary of Legislation
The bill requires the state treasurer, in consultation with the Division of Fire Prevention and Control
in the Department of Public safety (DPS), to finance the purchase of a fire hawk helicopter, configured
for wildfire and other public safety response needs. The treasurer may finance the purchase of the
asset or enter a certificate of participation (COP) agreement for no more than 20 years of annual
payments. Yearly payments for principal and interest under the financed purchase or COP, which is
subject to annual appropriations by the General Assembly, must not exceed $4.0 million. The financing
agreement must authorize the state or the division to obtain fee title to the helicopter on or before the
expiration of the terms of the financing agreement.
Background
The state enters into lease-purchase agreements using financial instruments called certificates of
participation (COPs). In this type of lease-purchase agreement, the state transfers its interests in a
property to a lessor in exchange for cash and then leases the property back through annual lease
payments. The lessor assigns its interests to a trustee, usually a commercial bank, who holds the title
to the property, collects lease payments from the state, and makes payments to the investors. The state
renews the lease each year and makes annual payments authorized through the Long Bill. The interest
rate paid by the state is fixed and depends on market conditions at the time COPs are priced for sale.
When the lease ends, the state owns the capital asset at no or minimal additional cost.
State Revenue
In FY 2023-24, the bill increases state revenue by up to $26.0 million, the estimated cost in 2024 to
purchase the firefighting aircraft. The exact amount will depend on the conditions of the
lease-payment issuance, as determined by the State Treasurer. The revenue generated will be
deposited in the Colorado Firefighting Air Corps Fund for the purchase of the aircraft.
State Expenditures
In FY 2023-24, the bill will result in a one-time cash fund expenditure to use the revenue generated by
the COP issue, which is anticipated to be $26.0 million, to fund the initial purchase of the helicopter.
This initial payment is assumed to be paid from the Firefighting Air Corps Fund, but could be made
from the General Fund. Then, once the helicopter is purchased and the state’s interest transfers to the
lessor, the state will be required to make payments of principal and interest pursuant to the
lease-purchase agreement beginning in FY 2023-24. The bill limits these payments to $4.0 million
annually. These annual payments are assumed to be paid from the General Fund, but may also be
made from the Firefighting Air Corps Fund or another fund.
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February 23, 2023 SB 23-161
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. Based on this fiscal note, the
bill is expected to increase the amount of General Fund held in reserve by the amounts shown in
Table 1, decreasing the amount of General Fund available for other purposes, if lease-purchase
payments are made from the General Fund.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
No appropriation is necessary. Depending on the timing and conditions of the finance agreement, the
state must appropriate up to $4.0 million annually for the purchase of the aircraft by the Division of
Fire Prevention and Control in DPS; however, the timing and exact amount of the appropriations are
as yet to be determined.
State and Local Government Contacts
Public Safety 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.