Senate Bill 25-313 Engrossed

A Bill for an Act

• Page 1, Line 101Concerning the permissible uses of state income tax revenue

• Page 1, Line 102raised in connection with Proposition 123.

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov/.)

Joint Budget Committee. Among other things related to affordable housing, Proposition 123, which was approved by the voters at the 2022 statewide election, created the affordable housing support fund (fund) and continuously appropriated money from the fund to the division of housing within the department of local affairs (department) for enumerated uses relating to an affordable home ownership program and a program serving persons experiencing homelessness and to the division of local government, also within the department, for enumerated uses relating to a local planning capacity development program. A specified percentage of money from the fund is allocated for the implementation of each program, and from each allocated percentage the division of housing or the division of local government, as applicable, is permitted to use up to 5% to pay for the direct and indirect costs of administering each program.

Beginning in state fiscal year 2026-27, the bill makes the expenditure of up to 5% of the money from each program's allocation of funding for administration of each program subject to annual appropriation by the general assembly and clarifies how that 5% amount is calculated.

The bill also allows the division of housing, subject to annual appropriation by the general assembly, to expend money under the program serving persons experiencing homelessness for:

• Capital needs at 2 state-owned supportive residential communities for persons experiencing homelessness (supportive residential communities); and
• Direct and indirect costs of operating the 2 supportive residential communities.

Proposition 123 also included a prohibition on the general assembly appropriating funds from the fund and the affordable housing financing fund to supplant other state support for affordable housing projects. The bill clarifies when appropriations from the fund and the affordable housing financing fund would violate this prohibition.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, 29-32-103, amend (1) as follows:

• Page 2, Line 329-32-103.  Transfers of money - permitted uses of the fund -

• Page 2, Line 4continuous appropriation. (1) (a)  The affordable housing support fund

• Page 2, Line 5is hereby created in the state treasury. The support fund shall consist

• Page 2, Line 6consists of money deposited into it under subsection (3) of this section.

• Page 2, Line 7The division of housing shall administer the support fund and expend the

• Page 2, Line 8money in the support fund only for the purposes set forth in sections

• Page 2, Line 9section 29-32-104 (3)(a) and (3)(b). The division of local government

• Page 3, Line 1in the department of local affairs created in section 24-32-103 shall

• Page 3, Line 2expend the money in the support fund only for the purposes set forth in

• Page 3, Line 3section 29-32-104 (3)(c). All money not expended or encumbered, and all

• Page 3, Line 4interest earned on the investment or deposit of money in the support fund,

• Page 3, Line 5shall remain remains in the support fund and shall does not revert to the

• Page 3, Line 6general fund or any other fund at the end of any fiscal year. Except as

• Page 3, Line 7otherwise provided in subsection (1)(b) of this section and

• Page 3, Line 8section 29-32-104 (3)(b)(II), all money transferred to the support fund

• Page 3, Line 9pursuant to subsection (3) of this section is continuously appropriated to

• Page 3, Line 10the division of housing for the purposes set forth in sections section

• Page 3, Line 1129-32-104 (3)(a) and (3)(b) and, to the extent allocated by the division of

• Page 3, Line 12housing, to the division of local government for the purposes set forth in section 29-32-104 (3)(c).

• Page 3, Line 13(b)  Subject to annual appropriation by the general

• Page 3, Line 14assembly, beginning in state fiscal year 2026-27, and subject to

• Page 3, Line 15the limitations set forth in section 29-32-104 (3)(a), (3)(b), and

• Page 3, Line 16(3)(c), the division of housing or the division of local government

• Page 3, Line 17may expend money from the fund for direct and indirect costs of

• Page 3, Line 18administering the programs set forth in section 29-32-104 (3)(a), (3)(b), and (3)(c).

• Page 3, Line 19SECTION 2.  In Colorado Revised Statutes, 29-32-104, amend (3) as follows:

• Page 3, Line 2029-32-104.  Permissible expenditures - affordable housing

• Page 3, Line 21programs - report - definitions. (3)  The division of housing and the

• Page 3, Line 22division of local government shall expend the money transferred to the

• Page 3, Line 23support fund in section 29-32-103 (1) to support the following programs

• Page 3, Line 24only:

• Page 4, Line 1(a)  An affordable home ownership program administered by the

• Page 4, Line 2division or one or more contractors of the division. The program shall

• Page 4, Line 3offer home ownership down-payment assistance to first-time homebuyers

• Page 4, Line 4and shall prioritize assistance, to the extent practicable, to first-generation

• Page 4, Line 5homebuyers. The assistance shall be provided to households with income

• Page 4, Line 6less than or equal to 120% one hundred twenty percent of the area

• Page 4, Line 7median income of households of that size in the territory or jurisdiction

• Page 4, Line 8of local government or tribal government in which the housing is located,

• Page 4, Line 9as calculated and published for a given year by the United States

• Page 4, Line 10department of housing and urban development, and the cost of the

• Page 4, Line 11monthly housing payment towards toward mortgage principal, mortgage

• Page 4, Line 12interest, property taxes, mortgage and homeowner's insurance,

• Page 4, Line 13homeowner association fees, land lease fees, and metropolitan district

• Page 4, Line 14fees shall not cost more than 35% thirty-five percent of monthly

• Page 4, Line 15household income. The program shall also make grants to non-profits

• Page 4, Line 16nonprofit organizations, local governments, tribal governments,

• Page 4, Line 17community development financial institutions, and community land trusts

• Page 4, Line 18to support affordable home ownership. The program shall also make

• Page 4, Line 19grants or loans to groups or associations of mobile home owners and their

• Page 4, Line 20assignees to assist them with the purchase of a mobile home park

• Page 4, Line 21pursuant to section 38-12-217. Said grants and loans shall be used to

• Page 4, Line 22support affordable home ownership for households with income less than

• Page 4, Line 23or equal to 100% one hundred percent of the area median income of

• Page 4, Line 24households of that size in the territory or jurisdiction of local government

• Page 4, Line 25or tribal government in which the households are located, as calculated

• Page 4, Line 26and published for a given year by the United States department of housing

• Page 4, Line 27and urban development, and the cost of the monthly housing payment

• Page 5, Line 1towards toward mortgage principal, mortgage interest, property taxes,

• Page 5, Line 2mortgage and homeowner's insurance, homeowner association fees, land

• Page 5, Line 3lease fees, and metropolitan district fees shall not cost more than 35%

• Page 5, Line 4thirty-five percent of monthly household income. All principal and

• Page 5, Line 5interest payments on loans made under this paragraph (a) subsection

• Page 5, Line 6(3)(a) shall be paid to the division and used by the division for the

• Page 5, Line 7purposes set forth in this subsection (3). Up to 50% fifty percent of

• Page 5, Line 8monies money transferred to the support fund annually may be used for

• Page 5, Line 9the program. The division shall determine how much of the available

• Page 5, Line 10funding shall be allocated to each aspect of the program. The division

• Page 5, Line 11may utilize up to 5% five percent of the funds it allocates receives

• Page 5, Line 12from the fund for the program each state fiscal year to pay for the direct and indirect costs of administering the program.

• Page 5, Line 13(b) (I)  A program serving persons experiencing homelessness to

• Page 5, Line 14be administered by the division. The program shall provide rental

• Page 5, Line 15assistance, housing vouchers, and eviction defense assistance, including

• Page 5, Line 16legal, financial, and case management, to persons experiencing

• Page 5, Line 17homelessness or at risk of experiencing homelessness. The program shall

• Page 5, Line 18also make grants or loans to non-profit nonprofit organizations, local

• Page 5, Line 19governments, tribal governments, or private entities to support the

• Page 5, Line 20development and preservation of supportive housing for persons

• Page 5, Line 21experiencing homelessness, and other homelessness related activities the

• Page 5, Line 22division determines contribute to the resolution of or prevention of

• Page 5, Line 23homelessness, including housing programs paid for by non-profit

• Page 5, Line 24nonprofit organizations, local governments, tribal governments, or

• Page 5, Line 25private entities on a pay for success pay-for-success basis, meaning an

• Page 5, Line 26organization, local government, tribal government, or private entity would

• Page 6, Line 1receive financial support from the program upon achieving objectives

• Page 6, Line 2contractually agreed upon with the division. All principal and interest

• Page 6, Line 3payments on loans made under this paragraph (b) subsection (3)(b)(I)

• Page 6, Line 4shall be paid to the division and used by the division for the purposes set

• Page 6, Line 5forth in this subsection (3). Up to 45% forty-five percent of monies

• Page 6, Line 6money transferred to the support fund annually may be used for the

• Page 6, Line 7program. The division may utilize up to 5% five percent of the funds it

• Page 6, Line 8allocates receives from the fund for the program each state fiscal year to pay for the direct and indirect costs of administering the program.

• Page 6, Line 9(II)  The program set forth in subsection (3)(b)(I) of this section may also:

• Page 6, Line 10(A)  Beginning in state fiscal year 2025-26 and subject to

• Page 6, Line 11annual appropriation by the general assembly, provide funding

• Page 6, Line 12to the state or any other entity for capital construction needs

• Page 6, Line 13at the Ridge View Supportive Residential Community and the Fort Lyon Supportive Residential Community; and

• Page 6, Line 14(B)  Provide funding to the state or any other entity for

• Page 6, Line 15direct and indirect costs of operating to the Ridge View

• Page 6, Line 16Supportive Residential Community and the Fort Lyon Supportive

• Page 6, Line 17Residential Community and, beginning in state fiscal year

• Page 6, Line 182026-27, provide such funding subject to annual appropriation by the general assembly;

• Page 6, Line 19(III)  As used in subsection (3)(b)(II) of this section:

• Page 6, Line 20(A)  "Fort Lyon Supportive Residential Community" means

• Page 6, Line 21the portion of the Fort Lyon property that is designated by the

• Page 6, Line 22division for providing homelessness-related activities that the

• Page 6, Line 23division determines contribute to the resolution of or prevention of homelessness.

• Page 7, Line 1(B)  "Ridge View Supportive Residential Community" means,

• Page 7, Line 2as set forth in section 24-32-730 (2)(a), the Ridge View campus

• Page 7, Line 3that, after July 1, 2022, is designated by the division for

• Page 7, Line 4providing homelessness-related activities that the division

• Page 7, Line 5determines contribute to the resolution of or prevention of homelessness.

• Page 7, Line 6(c)  A local planning capacity development program administered

• Page 7, Line 7by the division of local government. The program shall provide grants to

• Page 7, Line 8local governments and tribal governments to increase the capacity of local

• Page 7, Line 9government and tribal government planning departments responsible for

• Page 7, Line 10processing land use, permitting and zoning applications for housing

• Page 7, Line 11projects. Up to 5% of monies five percent of money transferred to the

• Page 7, Line 12support fund annually may be used for the program. The division of local

• Page 7, Line 13government may utilize up to 5% five percent of the funds that the

• Page 7, Line 14division of housing allocates from the fund for the program each state

• Page 7, Line 15fiscal year to pay for the direct and indirect costs of administering the program.

• Page 7, Line 16SECTION 3.  In Colorado Revised Statutes, 29-32-106, amend (1); add (3); and repeal (2) as follows:

• Page 7, Line 1729-32-106.  Appropriation requirement for affordable housing

• Page 7, Line 18projects - definition. (1)  For any state fiscal year in which money is

• Page 7, Line 19appropriated from the financing fund or the support fund in accordance

• Page 7, Line 20with the requirements of this article article 32, any such money

• Page 7, Line 21appropriated must supplement and shall not supplant the level of general

• Page 7, Line 22fund and cash fund appropriations state funding support for affordable

• Page 7, Line 23housing programs for the state fiscal year 2022-23.

• Page 8, Line 1(2)  For purposes of determining the appropriations for affordable

• Page 8, Line 2housing programs for the state fiscal year 2022-23, cash fund

• Page 8, Line 3appropriations do not include any appropriations of money that originated

• Page 8, Line 4from money the state received from the federal coronavirus state fiscal recovery fund.

• Page 8, Line 5(3) (a)  The general assembly violates subsection (1) of this

• Page 8, Line 6section only if, for a state fiscal year for which the legislative

• Page 8, Line 7council staff forecast for the March immediately preceding the

• Page 8, Line 8state fiscal year projected that state revenue in the state

• Page 8, Line 9fiscal year would exceed the state fiscal year spending limit

• Page 8, Line 10imposed by section 20 of article X of the state constitution, the

• Page 8, Line 11general assembly appropriates money from the financing fund or

• Page 8, Line 12the support fund in accordance with the requirements of this

• Page 8, Line 13article 32 for affordable housing programs and the total

• Page 8, Line 14amount of state funding support for affordable housing

• Page 8, Line 15programs is less in that state fiscal year than the total amount

• Page 8, Line 16of state funding support for affordable housing programs during the 2022-23 state fiscal year.

• Page 8, Line 17(b)  As used in this subsection (3), unless the context

• Page 8, Line 18otherwise requires, "state funding support" means, for a state fiscal year, the total of:

• Page 8, Line 19(I)  The amount of state money appropriated for

• Page 8, Line 20affordable housing programs by the general assembly in that state fiscal year that are not appropriations of money:

• Page 8, Line 21(A)  From the support fund or the financing fund;

• Page 8, Line 22(B)  That originated from the coronavirus state fiscal

• Page 8, Line 23recovery fund;

• Page 9, Line 1(C)  From the general fund that were refinanced in House Bill 24-1466;

• Page 9, Line 2(D)  That the state treasurer transferred to the housing development grant fund pursuant to section 24-22-118 (2);

• Page 9, Line 3(E)  That the state treasurer transferred from the

• Page 9, Line 4affordable housing and home ownership cash fund to the

• Page 9, Line 5transformational affordable housing revolving fund pursuant to section 24-32-731 (9)(d); or

• Page 9, Line 6(F)  That the general assembly appropriated from the

• Page 9, Line 7affordable housing and home ownership cash fund pursuant to section 24-32-721.3.

• Page 9, Line 8(II)  The reduction in state revenue for the state fiscal

• Page 9, Line 9year that is attributable to tax expenditures concerning

• Page 9, Line 10affordable housing programs that the office of state planning

• Page 9, Line 11and budgeting projects during the March revenue forecast that

• Page 9, Line 12immediately precedes the state fiscal year will be claimed in the state fiscal year; and

• Page 9, Line 13(III)  The reduction in state revenue for the state fiscal

• Page 9, Line 14year that is attributable to tax expenditures concerning

• Page 9, Line 15affordable housing programs, is not included in the projection

• Page 9, Line 16described in subsection (3)(b)(II) of this section, and is described

• Page 9, Line 17in fiscal notes provided by the legislative council of the general assembly pursuant to section 2-2-322.

• Page 9, Line 18SECTION 4.  Safety clause. The general assembly finds,

• Page 9, Line 19determines, and declares that this act is necessary for the immediate

• Page 9, Line 20preservation of the public peace, health, or safety or for appropriations for

• Page 10, Line 1the support and maintenance of the departments of the state and state institutions.