Colorado Legislative Council Staff

STATE and LOCAL

REVISED FISCAL NOTE

TABOR Refund Impact

General Fund Revenue and Expenditure Impact

Local Revenue and Expenditure Impact(Replaces Fiscal Note dated January 10, 1998)

TITLE:            CONCERNING PROPERTY RENTAL ISSUES.

Summary of Legislation

            This reengrossed bill amends statutes regarding property rental issues, including the following:

            •   provisions that a law enforcement officer and the law enforcement agency that executes a writ of restitution shall be immune from civil liability for any damage to a tenant’s property during the execution of the writ;

            •   provisions for the landlord to be immune from civil liability when complying with the writ of restitution;

            •   provisions for the landlord to store a tenant’s personal property that was removed during or after the execution of the writ;

            •   provisions, under the Colorado Consumer Protection Act, stipulating that it is a deceptive trade practice for a landlord to fail to provide certain utilities after being served a written notice of defect by the tenant;

            •   stipulations that the provisions of Section 6-1-113, C.R.S., regarding civil action damages are not available to any person, including the Attorney General and the District Attorney, for any claim of violation of deceptive trade practices;

            •   conditions and procedures for a tenant to terminate a lease and receive a security deposit refund if the landlord fails to provide certain utilities; and

            •   a statement that the provisions of this bill do not apply to mobile home rental agreements.

            The reengrossed bill also amends certain provisions of statutes regarding termination of occupancy to a contract of employment by requiring the county sheriff, rather than a local law enforcement agency, to remove an employee who has failed to vacate the premises after notice. The bill will become effective July 1, 1998.

            The provisions of this reengrossed bill will affect state revenue and expenditures. Therefore, it is assessed as having a state fiscal impact.

State Revenues

            The Colorado Consumer Protection Act (CCPA) prescribes a civil penalty, payable to the state General Fund, of not more than $2,000 for each violation of the Act; and of not more than $100,000 for any series of violations. The CCPA also prescribes a civil penalty, payable to the state General Fund, of not more than $10,000 for each violation of a court order pursuant to the Act.

            There are no historical records for these offenses, but this fiscal note assumes the provisions of this bill will generate General Fund revenue in excess of $10,000 for FY 1998-99.

TABOR Refund Impact

            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

State Expenditures

            The Office of the Attorney General and the district courts of the state are concurrently responsible for the enforcement of the CCPA. The Attorney General or district attorney is authorized to take necessary actions, including issuing subpoenas, conducting hearings, and promulgating rules to administer the provisions of the Act. Actions instituted pursuant to the Act may be brought in the county where an alleged deceptive trade practice occurred or where any portion of a transaction involving an alleged deceptive trade practice occurred, or in the county where the principal place of business of any defendant is located, or in the county in which any defendant resides.

            The Judicial Branch indicates landlord/tenant disputes are already common in the courts under current law. The Housing Information and Referral Service, a private organization that serves the metro-Denver area, receives about 20,000 calls per year. Of those calls, approximately 2,800 regard general habitability issues.

            The Office of the Attorney General believes that the provisions of this bill may generate up to 1,000 calls per month regarding landlord/tenant issues from all regions of the state. The Attorney General estimates that 300 of these calls per month, or 3,600 annually, would become cases that would require further investigation. A significant number of these cases may require subsequent litigation. Under current and proposed law, county district attorneys refer all civil consumer protection cases to the Office of the Attorney General because of case matter experience and resource limitations.

            As a result, the Office of the Attorney General will incur additional state administrative and legal services costs to administer, investigate, litigate, and enforce the provisions of this bill. Table 1 provides a summary of the Department of Law’s expenditures for FY 1998-99 and FY 1999-2000 to support the provisions of the reengrossed bill.

            The Judicial Branch has no historical data regarding the number of cases that would be subject to the provisions of this bill. As a result, this fiscal note cannot assess whether the provisions of this bill will substantially impact court caseload or administrative costs for the Judicial Branch, or whether these additional costs can be absorbed within existing resources.

Expenditures Not Included

            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:

            •   health and life insurance costs of $7,742;

            •   short-term disability costs of $264;

            •   inflationary cost factors;

            •   leased space; and

            •   indirect costs.

Local Government Impact

            At the local level, district attorneys may be responsible for the enforcement of the CCPA. Under current law, county district attorneys’ salaries are funded 80 percent state and 20 percent county. The remaining administrative and personal services costs of each district attorney’s office are funded by the county. Additional local government costs may be incurred to enforce the provisions of this bill, but the amount of these costs has not been estimated. The CCPA does not prescribe a jail sentence as a penalty.

Spending Authority

            This fiscal note would imply the Office of the Attorney General would require a General Fund appropriation of 3.5 FTE and $211,436 for FY 1998-99.

Departments Contacted

            Judicial           Law                Local Affairs