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June 10, 2024 HB 24-1029
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0597
Rep. Bradley
Sen. Baisley
Date:
Bill Status:
Fiscal Analyst:
June 10, 2024
Postponed Indefinitely
Alexa Kelly | 303-866-3469
alexa.kelly@coleg.gov
Bill Topic: PROHIBIT FOREIGN OWNERSHIP OF AGRICULTURE AND NATURAL RESOURCES
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill would have covered foreign persons from owning certain property interests in
Colorado and requires that persons obtaining property ownership register with the
Secretary of State. The Attorney General could have taken civil action for any
violations. The bill would have increased state expenditures and workload on an
ongoing basis and may have increased state and local revenue.
Appropriation
Summary:
For FY 2024-25, the bill would have required an appropriation of $194,156 to the
Department of State.
Fiscal Note
Status:
The final fiscal note reflects the introduced bill. The bill was postponed indefinitely by
the House State, Civic, Military, and Veterans Affairs Committee on March 7, 2024;
therefore, the impacts identified in this analysis do not take effect.
Table 1
State Fiscal Impacts Under HB 24-1029
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue - -
Expenditures Cash Funds $194,156 $23,869
Centrally Appropriated $10,616 $5,676
Total Expenditures $204,772 $29,545
Total FTE 0.6 FTE 0.3 FTE
Transfers - -
Other Budget Impacts - -
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June 10, 2024 HB 24-1029
Summary of Legislation
The bill prohibits nonresident foreign citizens, entities, or governments (covered foreign
persons) of the People’s Republic of China, the Russian Federation, or any country that is on the
U.S. Department of State’s list of state sponsors of terrorism, from acquiring a controlling
ownership share (more than 50 percent) of agricultural land, mineral rights, or water rights.
Any covered foreign person that acquires the controlling ownership share in a property interest
before January 1, 2025, may retain the property interest, but is prohibited from acquiring any
additional controlling ownership in a property interest after this date. If a controlling ownership
interest is acquired, it must be sold or otherwise disposed within two years.
Registration requirement. No later than March 1, 2025, or 60 days after acquiring any
ownership of a property interest, a covered foreign person with an ownership share must
register with the Secretary of State (SOS). The SOS may create rules to implement the
registration requirements. If a covered foreign person fails to register with the SOS, they are
subject to a penalty of up to $2,000, credited to the General Fund.
Civil action and fines. The Attorney General must take civil action in the district court where the
obtained property interest is located against any covered foreign person that is reasonably
believed to violate the prohibition or not comply with the registration requirement. If the
property interest is found to be acquired in violation of the law, the property interest reverts to
the state. The State Treasurer must sell the property, with proceeds from the sale, minus any
costs incurred by the state, returned to the covered foreign person, and any surplus transferred
to the treasurer of the county, or counties, where the property interest is located.
State Revenue
The bill may increase state revenue from fines to the General Fund and fees to the Department
of State Cash Fund, which are subject to TABOR.
Fine revenue. The bill creates a penalty for failure to register with the SOS of up to $2,000,
credited to the General Fund. This analysis assumes a high level of compliance and that any fine
revenue increase will be minimal.
Fee revenue. Colorado law requires legislative service agency review of measures which create
or increase any fee collected by a state agency. Under current law, the SOS is authorized to
adjust fees so that the revenue generated approximates its direct and indirect program costs.
The SOS is primarily funded through business filing fees. To cover the costs described in the
State Expenditures section below, fees may need to be raised to cover all or some of the costs of
this bill. The fees affected and the actual amount of fee charges will be set administratively by
the SOS based on cash fund balance, total program costs, and the estimated number of
professional activities subject to fees. This revenue is subject to TABOR.
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June 10, 2024 HB 24-1029
State Expenditures
The bill increases expenditures in SOS by approximately $205,000 in FY 2024-25 and
approximately $30,000 in future years, paid from the Department of State Cash Fund. The bill
may also increase expenditures in the Department of Law (DOL) and the Department of the
Treasury (Treasury). Costs are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 24-1029
FY 2024-25 FY 2025-26
Secretary of State
Personal Services $39,118 $23,485
Operating Expenses $768 $384
Capital Outlay Costs $6,670 -
Computer Programming $147,600 -
Centrally Appropriated Costs
1
$10,616 $5,676
Total Cost $204,772 $29,545
Total FTE 0.6 FTE 0.3 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Secretary of State. The SOS will incur costs to create and administer a new application
procedure to capture and store registration information. This registration system requires
0.3 FTE in the Business and Licensing Division in FY 2024-25 only, and an ongoing addition of
0.3 FTE in the Information Technology (IT) Division beginning in FY 2024-25. The work will
include drafting forms, research for rulemaking, training SOS staff, and participating in the
development and testing of the registration system. IT costs to develop and maintain the
registration system are estimated at 1,200 hours at $123 per hour in FY 2024-25 only.
Department of Law. The DOL may have an increase in expenditures to investigate and
prosecute civil actions against property ownership violations. Any increase is not expected until
FY 2025-26. The number of future cases of unlawful ownership is unknown and the expenditure
impact on DOL, if any, will be addressed during the budget process. The department may also
be required to assist in the promulgation of rules for the program.
Treasury Department. Beginning FY 2025-26, if the DOL brings civil action against a property
owner that results in property reverting to the state, Treasury must have a process to sell or
dispose of that property and distribute proceeds to the covered foreign person. Treasury may
retain a portion of sales to cover costs. Because this is a new responsibility for the department,
the cost likely includes new staff; however, since the number of unlawful ownership cases is
unknown, any increase in expenditures will be addressed during the budget process. Page 4
June 10, 2024 HB 24-1029
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.
Local Government
In cases where the state is required to sell property acquired from a covered foreign person,
counties may receive an increase in revenue from the sale of property if any proceeds of a sale
remain.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State Appropriations
For FY 2024-25, the bill requires an appropriation of $194,156 from the Department of State
Cash Fund to the Department of State, and 0.6 FTE.
State and Local Government Contacts
Agriculture Information Technology Judicial
Law Local Affairs Personnel
Secretary of State Treasury Natural Resources
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 the General Assembly website.