SB 25-020 Fiscal Note Legislative Council Staff Nonpartisan Services for Colorado’s Legislature SB 25-020: TENANT AND LANDLORD LAW ENFORCEM ENT Prime Sponsors: Sen. Weissman; Gonzales J. Rep. Lindsay; Mabrey Published for: Senate Appropriations Drafting number: LLS 25-0555 Fiscal Analyst: Clayton Mayfield, 303-866-5851 clayton.mayfield@coleg.gov Version: First Revised Note Date: March 24, 2025 Fiscal note status: The fiscal note reflects the introduced bill, as amended by the Senate Judiciary Committee. Summary Information Overview. The bill makes changes to the enforcement of tenant and landlord laws, and establishes a receivership process for residential housing. Types of impacts. The bill is projected to affect the following areas on an ongoing basis starting in FY 2025-26: Minimal State Revenue Minimal State Workload Local Government Appropriations. No appropriation is required. Table 1 State Fiscal Impacts Type of Impact Budget Year FY 2025-26 Out Year FY 2026-27 State Revenue $0 $0 State Expenditures $0 $0 Transferred Funds $0 $0 Change in TABOR Refunds $0 $0 Change in State FTE 0.0 FTE 0.0 FTE Page 2 March 24, 2025 SB 25-020 Summary of Legislation The bill makes several changes regarding the enforcement of tenant and landlord laws. Attorney General Enforcement Beginning January 1, 2026, the bill provides authority for the Attorney General and the Department of Law (DOL) to enforce housing protections for victims of unlawful sexual behavior, stalking, or domestic violence, documentation requirements for housing agreements, and regulations regarding bed bugs in residential premises. Additionally, current law provides specific legal powers to the DOL for a subset of independently initiated enforcement actions. The bill allows the use of these legal powers in any actions taken by the DOL pursuant to the powers and duties of the Attorney General, and also allows the DOL to seek any penalties or use any enforcement mechanisms provided to tenants by tenant and landlord laws. The bill specifies that any enforcement actions conducted by the DOL must occur within existing appropriations. Local Government Enforcement The bill allows counties and municipalities to independently initiate enforcement actions to regulate tenant and landlord laws. This authority is effective January 1, 2026, regarding the same three types of tenant and landlord laws referenced above. Enforcement authority for certain other types of tenant and landlord laws is effective upon passage of the bill. Limitations on compensation for private attorneys a local government retains for enforcement actions are established. Receivership of Residential Housing The bill establishes a process under which residential housing may be placed into receivership. Receivership is a legal process where a court appoints an entity to take control of a company’s assets to manage operations and repay debts. The DOL, or a city or county, may apply to a district court for the appointment of a receiver to operate multifamily residential property if owners violate state laws regarding maintenance of residential premises. The bill outlines the process for the conduct of receivership cases, including proper notice to parties, powers and responsibilities for entities appointed as receivers, and the process for ending receiverships. Background and Assumptions The bill provides discretionary authority for the DOL to take enforcement actions regarding covered tenant and landlord laws, and specifies that any state enforcement actions must occur within existing appropriations. Under current law, the DOL dedicates two staff attorneys for housing protection enforcement responsibilities. The fiscal note assumes the department’s staff Page 3 March 24, 2025 SB 25-020 will prioritize any additional enforcement actions within their existing workload, and that any future need for resources will be addressed during the annual budget process. State Revenue The bill potentially increases state revenue from civil penalties. Tenant and landlord laws provide a variety of relief options for aggrieved parties, including the assessment of civil penalties. Under the bill, the DOL is given authority to seek these penalties and any others already provided by law to the department under tenant and landlord laws. When civil penalties are awarded in cases brought by the department, they are classified as a damage award and not subject to TABOR. Given the uncertainty about the number of cases that may be pursued by the Attorney General, as well as the wide range in possible penalty amounts, the fiscal note cannot estimate the potential impact of these civil penalties. State Expenditures The bill increases workload in the Department of Law and in the Judicial Department, as outlined below. Department of Law Workload in the DOL will increase if additional housing protection violations covered by the bill occur. The department will review violations under the bill and prioritize enforcement as necessary within the overall number of housing protection violations and available resources. Trial Court Impacts — Judicial Department Workload for the trial courts in the Judicial Department will increase if additional civil cases are filed under the bill. This increase is expected to be minimal based on the assumed deterrent effect that the possibility of receivership will have on landlords who may be subject to enforcement actions. Any increase in workload for the trial courts can be absorbed within existing resources, and no change in appropriations is required. Local Government Similar to the state, workload will increase for counties and cities that choose to take enforcement actions allowed by the bill, including applying for receiverships and coordinating with the DOL, if necessary. The bill does not require local governments to take actions, so the fiscal note assumes that local governments will pursue enforcement actions according to available resources. Page 4 March 24, 2025 SB 25-020 Effective Date The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no referendum petition is filed. State and Local Government Contacts Counties Judicial Law Local Affairs Municipalities 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.