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March 27, 2023 SB 23-232
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0852
Sen. Zenzinger; Kirkmeyer
Rep. Bird; Sirota
Date:
Bill Status:
Fiscal Analyst:
March 27, 2023
Senate Appropriations
Erin Reynolds | 303-866-4146
Elizabeth Ramey | 303-866-3522
Bill Topic: UNEMPLOYMENT INS PREMIUMS ALLOCATION FED LAW COMPLIANCE
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☒ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
Budget package bill. The bill modifies unemployment insurance premiums and
surcharges to bring the Employment Support Fund into federal compliance. It also
refinances certain appropriations in the Department of Labor and Employment to use
cash funds rather than General Fund. It will shift funds beginning in FY 2023-24.
Appropriation
Summary:
For FY 2023-24, the bill moves an appropriation from the General Fund to a cash fund,
resulting in no net change to the amount appropriated.
Fiscal Note
Status:
The fiscal note reflects the introduced bill. The bill was recommended by the Joint
Budget Committee as part of its FY 2023-24 budget package.
Table 1
State Fiscal Impacts Under SB 23-232
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - -
Expenditures General Fund ($899,537) ($899,537)
Cash Funds $899,537 $899,537
Total Expenditures $0 $0
Transfers
1
Employment Support Fund ($53,820,600) -
Unemployment Compensation Fund $53,820,600 -
Net Transfer $0 -
Other Budget Impacts
1
TABOR Refund ($53,820,600) -
General Fund Reserve ($134,931) -
1
The transfer from the ESF assumes the March 2023 LCS Economic and Revenue Forecast. The JBC has opted to
budget to the OSPB revenue forecast. Difference between the OSPB and LCS forecasts may result in a different
estimated transfer amount, which in turn affects the TABOR refund impact of the bill. Page 2
March 27, 2023 SB 23-232
Summary of Legislation
To comply with federal Unemployment Tax Act requirements, the bill reduces employer
Unemployment Insurance (UI) premium rates by 10 percent across all rates in the standard premium
rate schedule. The reduction is offset by a corresponding increase to a new support surcharge rate.
The bill also establishes shares of the support surcharge allocated annually to the Employment
Support Fund (ESF), to the Employment and Training Technology Fund, and to the Benefit Recovery
Fund.
The bill changes the cap on the amount of money in the ESF at the end of any state fiscal year, from
an amount calculated based on a portion of the employer premium plus $17 million, to a total of
$32.5 million in FY 2023-24. The amount of money in the fund in excess of $32.5 million is to be
transferred to the Unemployment Compensation Fund, commonly referred to as the UI Trust Fund,
beginning at the end of FY 2023-24 and each year thereafter, with the cap to be adjusted annually in
future fiscal years based on changes in average weekly earnings.
The bill expands the authorized use of money in the Title XII Repayment Fund to allow the UI Division
in the Department of Labor and Employment (CDLE) to use the money for costs associated with bonds
or notes issued by the division, including interest on the bonds or notes. Finally, the bill eliminates
the requirement for employers to submit premium reports to the UI Division and instead requires
employers to submit wage reports.
State Transfers
Based on the March 2023 Legislative Council Staff Economic and Revenue Forecast, the bill creates a
one-time transfer estimated at $53,820,600 to the Unemployment Compensation Fund from the ESF.
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Table 2 below shows anticipated revenue to, and expenditures from, the ESF over the current and
budget fiscal years in order to estimate the amount that the ESF will exceed the bill’s cap in FY 2023-24.
At the end of each future fiscal years, the state treasurer is required to divert any revenue that would
put the ESF over the cap to the Unemployment Compensation Fund.
Table 2
Employment Support Fund Transfer Under SB 23-232
Fiscal Year Expenditures Revenue
Reserve Cap Transfer
FY 2022-23* $38,960,871 $55,419,674 $70,758,184 $72,419,674 -
FY 2023-24** $40,908,914
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$57,370,867 $86,320,600 $32,500,000 $53,820,600
* FY 2022-23 figures reflect preliminary CDLE expenditure accounting. LCS revenue estimates incorporate increases
in the chargeable wage base under SB 20-207. FY 2022-23 reflects the existing ESF cap under SB 22-234.
** FY 2023-24 figures reflect estimated expenditures from the ESF, including the $899,537 expenditure in this bill, but
excluding other pending legislation, and assume a 5 percent growth rate from FY 2023-24. FY 2023-24 reflects the
new cap established in this bill.
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The Joint Budget Committee has opted to budget to the Office of State Planning and Budgeting’s revenue forecast. The OSPB
forecast includes different UI revenue estimates than the LCS forecast, which will result in a different year-end transfer for
FY 2023-24. Page 3
March 27, 2023 SB 23-232
State Expenditures
The bill shifts $899,537 in expenditures from General Fund to the ESF starting in FY 2023-24. This
amount is based on funding for the following 2022 bills that received General Fund appropriations
and are eligible for ESF funds:
Senate Bill 22-161 – Wage Theft Employee Misclassification Enforcement;
Senate Bill 22-230 – Collective Bargaining for Counties; and
Senate Bill 22-210 – License Supplemental Health Care Staffing Agencies.
The bill shifts appropriations for these bills, including $433,209 for SB 22-161, $466,328 for SB 22-230,
and $189,368 for SB 22-210. It is assumed that similar amounts will continue to be spent from the ESF
in future years.
Other Budget Impacts
TABOR refunds. In FY 2023-24 only, the bill is expected to decrease the amount of state revenue
required to be refunded to taxpayers by $53.8 million. This estimate assumes the March 2023 LCS
revenue forecast and calculations of UI premiums credited to the ESF under the bill. The bill transfers
UI premiums that would be deposited to the ESF under current law to the TABOR -exempt
Unemployment Compensation Fund, thereby reducing forecasted expectations for cash fund revenue
subject to TABOR. Decreased cash fund revenue will increase the amount of General Fund available
to spend or save.
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 decrease the amount of General Fund held in reserve by the amounts shown in
Table 1, increasing the amount of General Fund available for other purposes.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
For FY 2023-24, the bill requires and includes the following appropriations to the Department of Labor
and Employment:
a reduction of $899,537 from the General Fund; and
an increase of $899,537 from the Employment Support Fund.
State and Local Government Contacts
Joint Budget Committee Staff Labor
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.