Ladies and Gentlemen:

I am filing with the Secretary of State House Bill 05-1331, "Concerning the Home Investment Fund." I vetoed this bill as of 11:03 a.m. today and this letter sets forth my reasons for doing so.

One of the fundamental requirements of setting up an investment fund is to identify the corresponding funding source. However, a funding source for the Home Investment Fund is conspicuously absent in H.B. 1331. Given that the proponents of the bill purposely left the funding source unidentified, it would be fiscally irresponsible for this bill to become law.

Of additional concern is the "predevelopment" language contained in H.B. 1331, which puts taxpayers' dollars at risk. Money from the Housing Investment Fund could be allocated for predevelopment costs including architectural plans, marketing plans, soil studies and similar activities. If a local community denies an application during the predevelopment stage, perhaps by the zoning board, then the dollars that were invested in the predevelopment planning are lost. Even if a local community approved an application, it is possible that a new affordable housing development might not produce enough revenue to cover the project's predevelopment costs. Allowing Fund dollars to be used for predevelopment purposes, especially in the absence of any guidelines, is a questionable use of (what might be) taxpayer dollars.

Questionable language is also included in Section 24-32-717 (a.5). The definition of "low- income family" is changed to "low-income household," and "household" is defined as "one or more persons occupying a housing unit." This definition is puzzlingly broad and appears to apply not only to families, but also to any group of people, whether they are related or not, that might occupy a housing unit for any period of time. Such an expansive definition is inappropriate for determining an area's need for affordable housing.

Another curious part of the bill is that it adds two additional members to the Housing Board. The current Board was not included in any discussions leading up to this proposed change. In addition, the Department of Local Affairs (DOLA), a state agency that receives very few General Fund dollars, would be expected to absorb the cost of those two new members. Without any justification for an expansion of the Housing Board, it is difficult to understand why DOLA's limited general fund dollars should be prioritized to fund that change.

While expanding the affordability and accessibility of housing for low-income Coloradans has been - and will continue to be - a priority for this administration, H.B. 1331 takes a misguided approach to fulfilling that need. The bill is missing the most basic requirement of an identifiable funding source, and also contains problematic definitions and uses for Housing Investment Fund dollars.

Accordingly, I have vetoed this bill.

Sincerely,