Press Room

Sen. Schwartz Saves the State Nearly $100 million

Thursday, May 6 2010

SB 200 Saves Taxpayers Money and Invests in Schools and Energy Projects

DENVER—Today, the Senate passed a bill  by Senator Gail Schwartz (D-Snowmass) which will save the state between $60-$100 million dollars and help fund school construction and local energy conservation projects. Senate Bill 200 updates Colorado law to conform with changes to federal law enacted this year by the Hiring Incentives to Restore Employment Act (HIRE).  SB 200 will be heard on third and final reading in the Senate tomorrow.

“This bill will continue the investments we have made in schools and local energy conservation,” said Sen. Schwartz. “This bill will bring jobs back to Colorado, improve our schools and infrastructure, pave the way for a New Energy Economy, all while saving the tax payer nearly $100 million.”  

SB 200 will allow Colorado to make use of Qualified School Construction Bonds and Qualified Energy Conservation Bonds which were created through the American Recovery and Reinvestment Act (ARRA).  By bringing Colorado law into conformity with federal law, the Colorado General Assembly is set to save Colorado taxpayers $60-$100 million with 0% interest bonds.  

Prior to this bill, all interest on direct subsidy bonds was paid by the state, but provisions in HIRE allow Colorado to issue bonds and keep the principal of the bond to invest in capital projects, while the federal government will make the interest payments to the bond holder.  

Facts about SB 200:

• Last year the legislature passed HB-1346 to let the state take advantage of all the ARRA bonds, which has been very successful, but it refers to these bonds as tax credit bonds so conforming amendments are necessary following the federal change.  

• The Qualified School Construction Bonds (QSCBs) are used to fund the BEST program.  They are 0% interest bonds that have already saved the program about $66MM and will save at least that much more in 2010.

• The Qualified Energy Conservation Bonds (QECBs) are assigned by GEO to local governments across the state.  These bonds are used to fund energy conservation projects and the federal government picks up 70%+ of the interest on them.  

• Without this very small change these bonds would be essentially unusable in CO and we would be leaving substantial federal money on the table.