Page 1
April 5, 2023 SB 23-213
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0890
Sen. Moreno
Rep. Jodeh; Woodrow
Date:
Bill Status:
Fiscal Analyst:
April 5, 2023
Senate Local Government
Josh Abram | 303-866-3561
josh.abram@coleg.gov
Bill Topic: LAND USE
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill requires the Department of Local Affairs to adopt model codes to increase
higher density housing options and to create methodologies for assessing and
planning for residential housing needs. Local governments must adopt model codes
or develop new local zoning and building codes meeting minimum standards. The bill
also requires that municipal water providers conduct a water loss audit and submit
validated audits and mitigation plans to the Department of Natural Resources. The bill
increases state and local expenditures beginning FY 2023-24.
Appropriation
Summary:
For FY 2023-24, the bill requires appropriations totaling about $15.6 million to multiple
state agencies.
Fiscal Note
Status:
The fiscal note reflects the introduced bill. This fiscal note is preliminary and will be
revised with more detail concerning fund splits and departmental expenditures at a
later date.
Table 1
State Fiscal Impacts Under SB 23-213
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - -
Expenditures General Fund $82,615 $1,713,266
Cash Funds $13,507,500 $1,492,500
Centrally Appropriated $257,477 $258,315
Total Expenditures $13,847,592 $3,464,081
Total FTE 13.2 FTE 13.2 FTE
Transfers
1
General Fund ($15.0 million) -
Cash Funds $15.0 million -
Net Transfer $0 -
Other Budget Impacts General Fund Reserve $2,274,392 $182,635
1
This transfer is made via an appropriation from the General Fund to the Housing Plans Assistance Fund.
Page 2
April 5, 2023 SB 23-213
Summary of Legislation
The bill establishes a state and local government framework for assessing statewide housing needs
and creating model codes for the regulation of higher density housing options, transit-oriented areas,
key corridors, manufactured housing, and other model housing strategies. Local governments are
required to conduct a housing needs assessment and are prohibited from enforcing certain occupancy
limits and zoning or master planning that limits higher density housing options.
Generally, state planning, housing needs assessments, and guidance for local governments must be
completed by December 2024, reporting templates and reporting requirements for local governments
must be available by December 2025, and model codes must be adopted locally or go into effect
December 2025 for large urban municipalities, and December 2026 for rural resort job center
municipalities.
State planning. The bill sets broad requirements for the Department of Local Affairs (DOLA) to assess
housing needs and assist local governments in complying with model codes and higher density
housing requirements. The DOLA, with recommendations from a multi-agency advisory committee,
must:
develop methodologies for assessing statewide, regional, and local housing needs;
produce comprehensive state, regional, and local housing assessments with a 20-year planning
forecast;
publish a menu of affordability strategies to address housing production, preservation, and
affordability;
publish a menu of displacement mitigation measures for urban municipalities;
issue guidance for creating a housing needs plan specifically for rural resort and large urban
municipalities;
develop reporting guidance and report templates for rural resort and large urban municipalities;
identify statewide strategic growth objectives; and
conduct a compliance review and approve municipal housing needs plans, or provide feedback,
and publish an analysis on a publically available dashboard that includes all the information in
municipal housing reports prepared by local governments.
The Governor’s Office of Climate Preparedness is required to consult with the Department of
Agriculture, Colorado Parks and Wildlife, the Outdoor Recreation Industry Office, and the
multi-agency advisory committee to identify priorities that metropolitan planning organizations
should apply to achieve connectivity and preservation of open space and agricultural land.
Multi-agency advisory committee. The bill creates a multi-agency advisory committee and staff
group comprised of representatives from the DOLA, the Colorado Energy Office, the Colorado
Department of Transportation (CDOT), and the Department of Natural Resources (DNR). The
advisory committee and multi-agency staff makes recommendations to the DOLA, and must also
report planning progress to the General Assembly. The advisory committee must engage various
stakeholders, and conduct multiple public comment and hearing process es concerning
recommendations made to the DOLA.
Page 3
April 5, 2023 SB 23-213
State funding. The bill creates the Housing Plans Assistance Fund and allows the Division of Housing
in DOLA to use money in the fund to provide grants, technical assistance, materials, briefings,
consulting services, templates, tools, trainings, webinars, or other guidance to local governments to
conduct housing assessments, and to assist local governments adopting the higher density housing
requirements. For FY 2023-24, the bill appropriates $15.0 million from the General Fund to the
assistance fund.
Local planning and reporting. Using guidance issued by the DOLA, rural resort municipalities and
large urban municipalities must participate in a regional housing needs assessment planning process,
and adopt and submit to the DOLA a housing needs plan. Plans must be developed with public
involvement, which may include public hearings. The local government plans must detail how the
municipalities will comply with state requirements for higher density housing, transit areas, and key
corridors, and describe the specific affordability strategies chosen from a menu of strategies published
by the DOLA. The plans must include a greenfield development analysis to classify areas outside the
urban boundaries as conservation areas, efficient growth areas, or general growth areas. The bill
details other data that must be reported to the DOLA annually.
Accessory dwelling unit model code. The bill requires that the DOLA adopt a model code for
accessory dwelling units, which at a minimum, must allow accessory dwelling units as a use by right
in any area of a municipality that allows single-unit detached dwellings as a use by right, and must
not include any requirement for off-street parking. Municipalities are required to adopt the model
code, or adopt local codes meeting the statewide minimum standards developed by the DOLA. If a
municipal government does not adopt the model code, the municipality is prohibited from enacting
laws that are more restrictive than other local laws for single detached units, and may not impose
unreasonable costs or delays for permitting, siting, and construction of accessory dwelling units.
Local governments may apply to the DOLA for a time extension to adopt the model code, but must
demonstrate that water, sewer, or storm water services are currently deficient in a subject area, and
include a plan to remedy any deficiency in water services. If the DOLA rejects a local plan, the model
code goes into effect immediately for the subject area until the DOLA determines that the subject
jurisdiction has adopted laws that comply with the minimum standards, or has adopted the model
code.
Middle housing model code. The DOLA must adopt a middle housing code for rural resort
municipalities and large urban municipalities. Middle housing refers to multi-unit apartment
buildings, townhomes, or cottage clusters. The model code must establish objective standards for the
minimum requirements for middle housing to be allowed as a use by right in any part of the
municipality that allows single-unit detached dwellings as a use by right. A municipality may adopt
the model code, but may not adopt local laws that are more restrictive than the state code for middle
housing. Local governments can apply for an extension for adopting the code due to limitations on
water service with approval from the DOLA.
Transit-oriented area model code. The DOLA must adopt a model code for a transit-oriented area
within urban municipalities with a large population. The bill details the minimum standards for a
transit-oriented area model code, including a requirement that subject jurisdictions allow a minimum
residential density limit for multifamily housing and mixed-income multifamily housing as a use by
right in transit oriented areas. A subject jurisdiction may adopt the model code but may not adopt
local laws that are more restrictive of high density housing in a transit-oriented area. A subject Page 4
April 5, 2023 SB 23-213
jurisdiction that does not adopt the model code must create a zoning district within transit-oriented
areas and allow high density development that meet specific gross density requirements.
Key corridor model code. DOLA must create a frequent transit services area map that designates
frequent transit service areas, showing areas that are within one-quarter mile of roadways served with
frequent bus or rapid transit service. The department must adopt a key corridor model code for
adoption by rural resort and large urban municipalities. Minimum standards in the key corridor
model code must include guidance to encourage regional strategies for key corridors, and identify a
net residential zoning capacity for each subject jurisdiction. A municipality that does not adopt the
code must establish a district within key corridors that allows multifamily residential housing as a use
by right, and that satisfies net residential zoning capacity established by minimum standards in the
other model codes.
Manufactured housing and tiny homes. The Division of Housing in the DOLA must consult the
multi-agency advisory committee and produce a report on the opportunities and barriers in current
state laws and regulations concerning the building of manufactured homes, modular homes, and tiny
homes. The bill removes certain financial assurances currently required of manufacturers of
factory-built structures. A local government must use the same standards and administrative review
to approve manufactured houses as are applied to the approval of site-built houses. The local
government may not impose more restrictive standards on manufactured or factory-built homes than
those applied to site-built homes, such as requirements for permanent foundations, minimum floor
space, or setbacks.
Planned unit development. A planned unit development application with residential use must not
restrict the permitting of accessory dwelling units, middle housing, housing in transit-oriented areas,
or housing in key corridors, or otherwise restrict housing density in contradiction to any of the model
codes adopted by the state or local governments.
Local government residential occupancy limits. A local government is prohibited from enacting or
enforcing residential occupancy limits that differ based on the relationships of the occupants of the
dwelling.
County master development plans. A master development planning document adopted by a county
must include the general location and extent of an adequate and suitable supply of water. For counties
with more than 250,000 residents, the master plan must also include a greenfield development
analysis. New, updated, or revised master plans must be submitted to the DOLA for review, and to
ensure that the plans include the most recent local housing needs assessment and housing plan, and
are in compliance with all model codes.
Water loss accounting. The bill requires that the Colorado Water Conservation Board (CWCB) in the
DNR adopt guidelines for the conduct of standardized water loss audits, and a process for water loss
audit report validation, that must be implemented by local water providers. The CWCB must create
a reporting process to allow water providers to submit audits to the board. Water loss audit reports
must also identify steps the water provider is taking to reduce water loss. The CWCB must deem
incomplete and return to the water provider any final water loss audit report found to be incomplete,
not validated, or without the required attestation from local government personnel. The water
provider has 90 days to cure the water loss audit report. With money from the Water Efficiency Grant Page 5
April 5, 2023 SB 23-213
Program Cash Fund, the CWCB may award grants between FY 2023-24 and FY 2025-26 to assist water
providers with validation services for their water loss audits.
Homeowners’ associations. The bylaws and covenant restriction of a Homeowners Association
(HOA) may not prohibit accessory dwelling units, middle housing in transit-oriented areas, or
housing in key corridors.
Transportation planning. Recommendations for existing and future transportation systems made by
the Colorado Department of Transportation (CDOT) must include prioritization criteria that are
consistent with state strategic growth objectives for regionally significant transportation projects. The
CDOT must ensure that prioritization criteria for any grant program are consistent with state growth
objectives. Spending from the Multimodal Transportation Projects Fund must only be made for
multimodal projects that the CDOT determines are consistent with state strategic growth objectives.
State Transfers
For FY 2023-24, the bill requires that $15.0 million be appropriated from the General Fund to the
Housing Plans Assistance Fund.
State Expenditures
The bill increases state expenditures in the Department of Local Affairs by $13.2 million in FY 2023-24
and $2.9 million in FY 2024-25, paid from the Housing Plans Assistance Fund and from the General
Fund. It also increases state expenditures in the Department of Natural Resources by $583,182 in
FY-2023-24 and $559,842 in FY 2024-25, paid from the Colorado Water Conservation Board
Construction Fund, and from the General Fund. Finally, it increases state expenditures in the
Colorado Energy Office by $31,738 in FY 2023-24 and $35,522 in FY 2024-25, paid from the General
Fund. The Department of Transportation will have similar costs as the Colorado Energy Office;
however, that staff effort does not require new appropriations for FY 2023-24, or FY 2024-25. State
expenditures are shown in Table 2 and detailed below.
Page 6
April 5, 2023 SB 23-213
Table 2
Expenditures Under SB 23-213
FY 2023-24 FY 2024-25
Department of Local Affairs
Personal Services $1,050,420 $1,056,893
Operating Expenses $15,525 $16,470
Capital Outlay Costs $80,040 $66,700
Computer Programming $15,015 $5,760
Consultant Pool & Tech. Assistance $11,846,500 $1,485,000
Travel & Vehicle Lease - $13,214
Centrally Appropriated Costs
1
$225,172 $224,680
FTE – Personal Services 11.5 FTE 11.4 FTE
DOLA Subtotal $13,232,672 $2,868,717
Department of Natural Resources
Personal Services $117,825 $117,825
Operating Expenses $2,025 $2,025
Capital Outlay Costs $13,340 $0
Travel $2,424 $2,424
Database Licensing $10,000 $10,000
Contractor—Database Upgrades $10,000 $0
Contractor—Utilities Training & 3
rd
Party Validation $400,000 $400,000
Centrally Appropriated Costs
1
$27,568 $27,568
FTE – Personal Services 1.5 FTE 1.5 FTE
DNR Subtotal $583,182 $559,842
Colorado Energy Office
Personal Services $27,001 $29,455
Centrally Appropriated Costs
1
$4,737 $6,067
FTE – Personal Services 0.2 FTE 0.3 FTE
CEO Subtotal $31,738 $35,522
Total $13,847,592 $3,464,081
Total FTE 13.2 FTE 13.2 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Page 7
April 5, 2023 SB 23-213
Department of Local Affairs
Personal services. The DOLA will add new staff in the Division of Local Government, the State
Demography Office, and the Division of Housing to develop comprehensive statewide planning
methodologies and assessments and to assist local governments to do the same. This includes
publishing a strategy of affordable housing options and displacement mitigation menus for use by
municipalities and other local governments. New staff are also required to create model codes for
accessory dwelling units, middle housing, transit-oriented areas and key corridors. Staff costs will
include some travel expenses beginning FY 2024-25. Costs include standard operating and capital
outlay costs, and for FTE funded with General Fund, include the required pay date shift.
Consultant pool & technical assistance. The bulk of cash fund expenditures are for technical
assistance, reporting guidance, support for locally developed housing needs assessments, and other
assistance provided to local governments to adopt new building codes meeting minimum standards,
and to comply with new reporting requirements to the state. These technical assistance costs are
identified in FY 2023-24, and are part of the FY 2023-24 fiscal year appropriation; however, actual
expenditures are likely to roll forward into FY 2024-25.
Department of Natural Resources
Personal services. The DNR will have new costs in the executive director’s office to participate and
provide staff support to the multi-agency advisory committee. Staff in Colorado Parks and Wildlife
are necessary to consult with the Office of Climate Preparedness in the DOLA and prepare a natural
and agricultural lands priorities report. New staff costs in the CWCB are to assist local governments
and other municipal water providers to conduct and report a water loss audit. In total, new personal
service costs equate to 1.5 FTE and include standard operating, and capital outlay costs. New FTE
paid from the General Fund are prorated for the required pay date shift.
Database licensing and updates. DNR will have information technology costs to update existing
databases and database licensing for external logins and other reporting updates allowing municipal
water providers to submit water loss audits for review, and to resubmit reports to cure deficiencies
found by CWCB staff.
Contractor training. The CWCB must train and certify technical experts capable of conducting third
party validations of municipal water loss audits. CWCB will hire temporary contractors to developing
water loss audit validation curriculum and training, which can be delivered to technical experts
providing services to municipal water providers. This contracted service is estimated at about
$400,000 annually, paid from the CWCB Construction Fund.
Colorado Energy Office.
Personal services. The CEO will have personal service costs to participate in the multi-agency
advisory committee making recommendations to the DOLA on the requirements for model codes and
other deliverables. Personal service costs include only the salary expense for 0.3 FTE in both
FY 2023-24, and FY 2024-25. First-year costs are prorated for the General Fund pay date shift.
Page 8
April 5, 2023 SB 23-213
Other State Agencies
The bill increases workload in the Department of Agriculture, Colorado Parks and Wildlife, and the
Outdoor Recreation Industry Office in the Office of Economic Development and International Trade.
Broadly, these agencies must collaborate to produce guidance on connectivity with open and
agricultural spaces. The bill may also minimally increase water court activity in the Judicial
department to address any change of water use as a result of new model codes for higher density
housing. These efforts do not require new appropriations.
Department of Law. Costs increase to assist the DOLA and the DNR with legal services developing
new rules and model codes. It is assumed any additional legal service costs will be addressed through
the annual budget process, if necessary.
Department of Transportation. Workload increases to participate on the multi-agency advisory
committee, which can be accomplished within existing appropriations.
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 2.
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.
Local Government
This bill has extensive fiscal impacts for applicable jurisdictions, including large urban municipalities,
some smaller municipalities in metro areas, and rural resort job center municipalities. Additional
research is necessary to identify affected jurisdictions and deadlines for specific compliance.
Generally, municipal governments and some county governments must update local code, submit
proof of compliance, update posted materials, complete greenfield analyses, complete housing plans,
submit housing plans, participate in regional planning groups, conduct public outreach and hearings,
and respond to modification requests from the state and revise as necessary. Planning and reporting
activities recur every five years. Initial compliance tasks are estimated by the DOLA at an average of
$29,500 per jurisdiction for initial compliance, and $120,000 per jurisdiction every 5 years for the
required periodic updates. Local government impacts will be updated in a revised fiscal note when
more information is collected.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature. Page 9
April 5, 2023 SB 23-213
State Appropriations
For FY 2023-24, the bill requires the following appropriations:
$15,000,000 from the General Fund to the Housing Plans Assistance Fund;
$500,000 from the Colorado Water Conservation Board Construction Fund to the Department of
Natural Resources;
$55,614 from the General Fund to the Department of Natural Resources; and
$27,001 from the General Fund to the Colorado Energy Office.
State and Local Government Contacts
Counties Governor Judicial
Law Local Affairs Municipalities
Natural Resources Public Safety Regulatory Agencies
Special Districts Transportation
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.