Senate Committee of Reference Report
Committee on Local Government & Housing
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February 26, 2026
After consideration on the merits, the Committee recommends the following:
SB26-040 be amended as follows, and as so amended, be referred to the Committee of the Whole with favorable recommendation:
Page 1, Line 1Amend printed bill, page 2, after line 1 insert:
Page 1, Line 2"SECTION 1. In Colorado Revised Statutes, 29-32-103, amend
Page 1, Line 3(1)(a) as follows:
Page 1, Line 429-32-103. Transfers of money - permitted uses of the fund -
Page 1, Line 5continuous appropriation.
Page 1, Line 6(1) (a) The affordable housing support fund is hereby created in
Page 1, Line 7the state treasury. The support fund consists of money deposited into it
Page 1, Line 8under subsections (1)(b)(II) and (3) of this section, and under sections
Page 1, Line 929-32-104 (3)(a.5)(II) and 29-32-104 (3)(a.5)(III). The division of
Page 1, Line 10housing shall administer the support fund and expend the money in the
Page 1, Line 11support fund only for the purposes set forth in section 29-32-104 (3)(a),
Page 1, Line 12(3)(a.5), and (3)(b). The division of local government in the department
Page 1, Line 13of local affairs created in section 24-32-103 shall expend the money in the
Page 1, Line 14support fund only for the purposes set forth in section 29-32-104 (3)(c).
Page 1, Line 15Except as otherwise provided in subsection (1)(b) of this section, all
Page 1, Line 16money not expended or encumbered, and all interest earned on the
Page 1, Line 17investment or deposit of money in the support fund, remains in the
Page 1, Line 18support fund and does not revert to the general fund or any other fund at
Page 1, Line 19the end of any fiscal year. Except as otherwise provided in subsections
Page 1, Line 20(1)(b) and (1)(c) of this section and section 29-32-104 (3)(b)(II), all
Page 1, Line 21money transferred to the support fund pursuant to subsection (3) of this
Page 1, Line 22section and section 29-32-104 (3)(a.5) is continuously appropriated to
Page 1, Line 23the division of housing for the purposes set forth in section 29-32-104
Page 1, Line 24(3)(a), (3)(a.5), including for the payment of administrative
Page 1, Line 25expenses of the program created in section 29-32-104 (3)(a.5), and
Page 1, Line 26(3)(b) and, to the extent allocated by the division of housing, to the
Page 1, Line 27division of local government for the purposes set forth in section
Page 2, Line 129-32-104 (3)(c).".
Page 2, Line 2Renumber succeeding sections accordingly.
Page 2, Line 3Page 2, line 2, after "amend" insert "(1)(a) and".
Page 2, Line 4Page 2, line 3 strike "(3)(a)" and substitute "(3)(a); and add (3)(a.5)".
Page 2, Line 5Page 3, after line 1 insert:
Page 2, Line 6"(1) The office shall contract with the administrator. The office
Page 2, Line 7may select an administrator without a competitive procurement process
Page 2, Line 8but shall announce the contract opening publicly and select the
Page 2, Line 9administrator in a meeting that is open to the public, no less than
Page 2, Line 10seventy-two hours after notice of such meeting is publicly available. No
Page 2, Line 11single contract may exceed five years in duration. Upon the expiration of
Page 2, Line 12any contract term, the office may renew the contract with the same
Page 2, Line 13administrator or may select another administrator. The administrator
Page 2, Line 14selected by the office shall expend the money transferred to the financing
Page 2, Line 15fund in section 29-32-103 (2) that the administrator receives from the
Page 2, Line 16office to support the following programs only:
Page 2, Line 17(a) A land banking program to be administered by the
Page 2, Line 18administrator. The program shall provide grants to local governments and
Page 2, Line 19tribal governments and loans to non-profit organizations with a
Page 2, Line 20demonstrated history of providing affordable housing to acquire and
Page 2, Line 21preserve land for the development of affordable housing. For purposes of
Page 2, Line 22this subsection (1)(a), "affordable housing" means rental housing that has
Page 2, Line 23a designated imputed income limit by household size not to exceed sixty
Page 2, Line 24percent of the area median income as established by the United States
Page 2, Line 25Department of Housing and Urban Development and published by the
Page 2, Line 26department or a statewide political subdivision or authority on housing,
Page 2, Line 27and regulated units in the project must have a gross rent limit that does
Page 2, Line 28not exceed thirty percent of the imputed income limitation applicable to
Page 2, Line 29the units and for-sale housing that could be purchased by a household
Page 2, Line 30with an annual income of at or below one hundred twenty percent of the
Page 2, Line 31area median income. Mixed use development is an allowable use of land
Page 2, Line 32purchased under this program if the predominant use of the land is
Page 2, Line 33affordable housing. Loans made by the program shall be forgiven if land
Page 2, Line 34acquired with the assistance of the program is properly zoned with an
Page 2, Line 35active plan for the development of affordable housing within 5 years of
Page 2, Line 36date the loan is made and if the development is permitted and funded
Page 2, Line 37within 10 years. The lender and borrower may establish additional terms
Page 2, Line 38if needed. If land acquired with the assistance of the program is not
Page 3, Line 1developed within the timeline above, the loan must be repaid, with
Page 3, Line 2interest, as soon as practical, but not more than six months after
Page 3, Line 3expiration of said timeline, unless the office agrees to extend all or a
Page 3, Line 4portion of the timeline in its reasonable discretion. Land acquired with the
Page 3, Line 5assistance of the program that is not developed within the timeline above
Page 3, Line 6may be used by the owner for any purpose upon payment of the loan with
Page 3, Line 7interest or, in exchange for a waiver of interest, conveyed to a state
Page 3, Line 8agency or other entity for the development of affordable housing with the
Page 3, Line 9approval of the administrator. All principal and interest payments on
Page 3, Line 10loans made under this paragraph (a) subsection (1)(a) shall be paid to
Page 3, Line 11the administrator and used by the administrator for the purposes set forth
Page 3, Line 12in this subsection (1). As determined by the administrator, a minimum of
Page 3, Line 1315% and a maximum of 25% of monies transferred to the financing fund
Page 3, Line 14annually may be used for the program. The administrator may utilize the
Page 3, Line 15funds it receives from the office for the program to pay for the costs of
Page 3, Line 16administering the program; except that the total combined annual
Page 3, Line 17administrative expenditures of money from the financing fund by the
Page 3, Line 18administrator and the office shall not exceed two percent of the funds the
Page 3, Line 19administrator receives from the office for the program for the state fiscal
Page 3, Line 20year.".
Page 3, Line 21Page 3, line 18, strike "income." and substitute "income. income; except
Page 3, Line 22that the cost of the monthly housing payment must not be
Page 3, Line 23considered when providing homeowners with assistance for home
Page 3, Line 24rehabilitation.".
Page 3, Line 25Page 3, line 22, after "to" insert "either one hundred twenty percent
Page 3, Line 26of the area median income of households of that size in the
Page 3, Line 27territory or jurisdiction of a local government or tribal
Page 3, Line 28government in which the households are located, or".
Page 3, Line 29Page 4, line 4, after "income." insert "The area median income
Page 3, Line 30election described in this subsection (3)(a)(I) must be made at the
Page 3, Line 31beginning of the assistance agreement and must not be revoked
Page 3, Line 32or changed until the end of the assistance agreement.".
Page 3, Line 33Page 4, line 8, after "hundred" insert "twenty".
Page 3, Line 34Page 5, after line 4, insert:
Page 3, Line 35"(3) (a.5) An affordable homeownership program that
Page 3, Line 36makes construction loans or enables loan guarantees to
Page 3, Line 37eligible organizations for project development.
Page 4, Line 1(I) The term of any loan made pursuant to this subsection
Page 4, Line 2(3)(a.5) must not exceed twenty-four months and must not be
Page 4, Line 3renewed or reissued for the same project.
Page 4, Line 4(II) All principal payments on any loan made pursuant to
Page 4, Line 5this subsection (3)(a.5) shall be paid to the division, which shall
Page 4, Line 6deposit the money in the state affordable housing support fund,
Page 4, Line 7created in section 29-32-103 (1)(a), and the money must be used to
Page 4, Line 8further the purposes of subsections (3)(a) or (3)(b) of this
Page 4, Line 9section.
Page 4, Line 10(III) All interest payments and fees paid on loans or loan
Page 4, Line 11guarantees made pursuant to this subsection (3)(a.5) shall be
Page 4, Line 12paid to the division, which shall deposit the money in the state
Page 4, Line 13affordable housing support fund, created in section 29-32-103
Page 4, Line 14(1)(a), and the money must be used by the division for the
Page 4, Line 15administration of the program created in this subsection (3)(a.5).
Page 4, Line 16The cumulative interest or fees charged on loans or loan
Page 4, Line 17guarantees that are collected by the division must not
Page 4, Line 18substantially exceed the cost of administration of this
Page 4, Line 19subsection (3)(a.5).
Page 4, Line 20(IV) The division shall determine how much of the
Page 4, Line 21available funding from the state affordable housing support
Page 4, Line 22fund shall be allocated to the program described in this
Page 4, Line 23subsection (3)(a.5), but shall not reduce funding for the
Page 4, Line 24programs described in subsections (3)(a) or (3)(b) of this section
Page 4, Line 25to support the program described in this subsection (3)(a.5).".
Page 4, Line 26Page 6, line 12, strike "(a)".
Page 4, Line 27Page 6, line 14, strike "income, an eligible" and substitute "income,".
Page 4, Line 28Page 6, strike lines 15 through 27.
Page 4, Line 29Page 7, strike lines 1 through 25 and substitute "the division may
Page 4, Line 30approve an eligible organization's".
Page 4, Line 31Page 8, strike lines 1 through 22 and substitute "29-32-104 (3)(a). The
Page 4, Line 32six-month marketing period specified in subsection (3)(c)(II) of
Page 4, Line 33this section does not apply to the process described in this
Page 4, Line 34subsection (3).".
Page 4, Line 35Renumber succeeding subsection accordingly.
Page 4, Line 36Page 8, line 26, after "project." insert "The division has the
Page 5, Line 1authority to rent or allow the rental of a residential unit
Page 5, Line 2constructed as part of the project.".
Page 5, Line 3Page 9, line 2, strike "project." and substitute "project and develop a
Page 5, Line 4process to return rented units to the for-sale market.".
Page 5, Line 5Page 9, after line 2 insert:
Page 5, Line 6"(c) A homeowner may rent a unit funded pursuant to
Page 5, Line 7section 29-32-104 (3)(a) as long as the unit remains their primary
Page 5, Line 8residence.".