C.R.S. § 10-4-2003: Strengthen Colorado homes enterprise - creation - purpose - enterprise board - powers and duties - fee - fund - gifts, grants, or donations - rules - reporting - repeal.

(1) Enterprise - creation - purpose.

(a) (I) The strengthen Colorado homes enterprise is created in the division. The enterprise is a type 1 entity, as defined in section 24-1-105, and exercises its powers and performs its duties and functions under the division. The enterprise is and operates as a government-owned business within the division.

(II) The business purpose of the enterprise, acting through the board, is to impose and collect a fee charged to insurers that offer multiperil homeowner's insurance policies and to use the revenue from the fee to provide the following business services, as determined by the board, to insurers paying the fee:

(A) Reducing insurer losses and administrative expenses due to hail damage claims by defraying the cost of retrofitting residential property by providing grants for the installation of resilient roof systems;

(B) Analyzing data on hail losses in the homeowner's insurance market to identify the areas of the state to target for the installation of resilient roof systems to maximize insurer savings;

(C) Setting standards for resilient roof systems that insurers may rely upon and ensuring that there is a workforce trained to certify for insurers that roofs meet those standards;

(D) Creating codes of conduct for roofing contractors to ensure roofs are properly and appropriately installed, which benefits insurers by reducing their claims losses;

(E) Evaluating roofing protocols to ascertain if the protocols meet similar science-based, certifiable standards, as those of the Insurance Institute for Business and Home Safety's "Fortified" program;

(F) Awarding grants to individuals to defray the costs of training and certification relating to installing and certifying resilient roof systems and to develop the workforce for installing and certifying resilient roof systems;

(G) Reducing the frequency of wind and hail damage claims on insured residences;

(H) Improving insurance market stability throughout the state; and

(I) Conducting a study to analyze insurance risk in high-risk wildfire areas of the state, which analysis includes the degree of market competition among insurers in those areas and the impact of a high risk program on the potential losses in and the availability of homeowner's insurance in high-risk wildfire areas of the state.

(b) The enterprise is authorized to issue revenue bonds.

(c) The enterprise constitutes an enterprise for purposes of section 20 of article X of the state constitution so long as it retains the authority to issue revenue bonds and receives less than ten percent of its total revenues in grants from all Colorado state and local governments combined. So long as it constitutes an enterprise pursuant to this subsection (1), the enterprise is not subject to section 20 of article X of the state constitution.

(2) Enterprise board.

(a) The enterprise is governed by the enterprise board.

(b) The board consists of the following seven voting members:

(I) The commissioner or the commissioner's designee; and

(II) The following six members appointed by the governor and confirmed by the senate to serve three-year terms:

(A) Two members who represent insurers with expertise in homeowner's insurance;

(B) One member who is a county commissioner or a county employee who has expertise or experience in home hardening or other risk mitigation activities;

(C) One member who represents consumers;

(D) One member with expertise in home hardening, roofing construction, or manufacturing resilient roof systems or materials; and

(E) One member with technical expertise in homeowner's insurance, such as expertise in underwriting, actuarial analysis, or claims handling, or expertise in home hardening.

(c) Of the first members appointed to the board pursuant to subsection (2)(b)(II) of this section, the governor shall select two members to serve an initial term of two years.

(d) (I) The governor shall make the initial appointments to the board no later than January 1, 2027.

(II) Subsection (2)(c) of this section and this subsection (2)(d) are repealed, effective July 1, 2027.

(e) The commissioner or the commissioner's designee is the chair of the board.

(f) Members of the board serve without compensation but must be reimbursed from money in the fund for actual and necessary expenses incurred in the performance of their duties pursuant to this part 20.

(g) Each member of the board shall disclose any actual or potential conflict of interest, including any financial interest in contracts, grants, or standards considered, awarded, adopted, or recommended by the board.

(h) The enterprise board is subject to the open meetings provisions of the "Colorado Sunshine Act of 1972" contained in part 4 of article 6 of title 24. Except as may otherwise be provided by federal law or state law, the records of the enterprise are public records, as defined in section 24-72-202 (6), and are subject to the "Colorado Open Records Act", part 2 of article 72 of title 24.

(3) Powers and duties.

(a) The primary powers and duties of the enterprise, acting through the board, are to:

(I) Impose and collect the fee pursuant to subsection (4) of this section;

(II) Award grants from money in the fund in accordance with the grant program requirements specified in section 10-4-2004;

(III) Issue revenue bonds for the expenses of the enterprise, secured by revenue of the enterprise;

(IV) Invest the revenue from the issuance and sale of revenue bonds and the imposition and collection of the fee. In investing the revenue, the enterprise may:

(A) Invest the revenue without regard to the limitations set forth in section 24-36-103, 24-75-601.1, or 24-75-603; and

(B) Enter into contracts with private professional fund managers to provide expertise, technical support, and advice on investment market conditions. In seeking bids for such contracts, the enterprise shall employ standard public bidding practices, including the use of requests for information, requests for proposals, or any other standard vendor selection practices determined by the enterprise to be best suited to selecting an appropriate private professional fund manager.

(V) Pay the administrative expenses of the enterprise;

(VI) Engage the services of public or private entities, contractors, or consultants for professional and technical assistance and to provide advice and other services related to conducting the affairs of the enterprise, without regard to the "Procurement Code", articles 101 to 112 of title 24. In conducting its affairs, the enterprise shall:

(A) Engage the attorney general's office for legal services; and

(B) Enter into a contract or contracts with the division at fair market rates for office space and administrative staff for the enterprise;

(VII) Prepare and submit an annual financial report pursuant to subsection (7) of this section concerning the administration of the enterprise and the grant program and post the report on the enterprise's public-facing website; and

(VIII) Exercise all rights and powers necessary or incidental to or implied from the specific powers and duties granted in this part 20.

(b) The enterprise, acting through the board, may seek, accept, and expend grants or other money from the federal government and gifts, grants, or donations from other public and private sources to support and enhance enterprise activities; except that the enterprise shall not accept grants from the state or from local governments unless the combined total of all grants from such sources is under ten percent of the enterprise's annual revenue.

(4) Fee.

(a) Beginning in the 2027 calendar year, on or before a date determined by the enterprise board, and annually each calendar year thereafter on or before the same date, the enterprise board shall impose and collect a fee on each insurer in an amount equal to one-half of one percent of the total premium collected by the insurer on multiperil homeowner's insurance policies issued in the state in the immediately preceding calendar year.

(b) Each insurer shall pay the fee to the enterprise and shall not surcharge the fee amount to policyholders.

(c) The state treasurer shall credit the fees collected to the fund. A fee collected by the enterprise is excluded from the state's fiscal year spending.

(d) Notwithstanding subsection (4)(a) of this section, the enterprise may lower the fee or cease collecting the fee in any calendar year to ensure that the total amount of fee revenue does not exceed one hundred million dollars over the first five fiscal years of the enterprise's existence.

(e) The board may request information from insurers about policies and contracts only to the extent the information is reasonably necessary to administer the grant program, impose and collect the fee, or implement other requirements in this part 20. Insurer data requests shall be coordinated through the division and, to the extent practicable, be limited to information already collected by the division or available through existing regulatory reporting.

(f) The board shall adopt any rules necessary for the imposition and collection of the fee.

(5) Fund.

(a) The strengthen Colorado homes enterprise fund is created in the state treasury.

(b) The fund consists of:

(I) Fees imposed and collected pursuant to subsection (4) of this section;

(II) Grants or other money received from the federal government or gifts, grants, and donations received from public or private sources to support or enhance enterprise activities;

(III) Any money from revenue bonds issued pursuant to subsection (3)(a)(III) of this section; and

(IV) Any money that the general assembly may appropriate or transfer to the fund.

(c) Money in the fund is continuously appropriated to the enterprise for the purposes set forth in this part 20 and to pay the enterprise's reasonable and necessary administrative and operating expenses.

(d) The state treasurer shall credit all interest and income derived from the deposit and investment of money in the fund to the fund.

(6) Rules. The enterprise board may adopt, amend, or repeal rules or policies that are reasonable and necessary for the regulation of the enterprise's affairs and the conduct of the enterprise's business consistent with this part 20, including grant program rules specified in section 10-4-2004 (7).

(7) Reporting.

(a) Notwithstanding section 24-1-136 (11)(a)(I), beginning July 1, 2028, and each July 1 thereafter, the enterprise shall submit a report to the committees of reference of the general assembly to which the department is assigned pursuant to section 2-7-203 concerning the implementation and administration of the enterprise and the grant program.

(b) The annual report must include:

(I) The amount of fees collected from insurers and the unobligated balance of the fund;

(II) The number of grant program applications and the amount of grants awarded;

(III) The areas of the state where grant program recipients reside;

(IV) If the board awards grants for workforce training, information about the structure of the training programs and the number of contractors trained; and

(V) Any other information relevant to the success of the enterprise and the grant program.