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July 20, 2022 HB 22-1381
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-1027
Rep. Titone; McKean
Sen. Winter; Woodward
Date:
Bill Status:
Fiscal Analyst:
July 20, 2022
Signed into Law
Christina Van Winkle | 303-866-6289
Christina.VanWinkle@state.co.us
Bill Topic: CO ENERGY OFFICE GEOTHERMAL ENERGY GRANT PROGRAM
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill creates the geothermal energy grant program in the Colorado Energy Office
for single-structure geothermal grants, community district heating grants, and
geothermal electricity generation grants. From FY 2022-23 to FY 2024-25, it increases
state revenue and expenditures and may increase local government revenue and
expenditures.
Appropriation
Summary:
No appropriation is required. The Geothermal Energy Grant Fund created in the bill
is continuously appropriated to the Colorado Energy Office.
Fiscal Note
Status:
The fiscal note reflects the enacted bill.
Table 1
State Fiscal Impacts Under HB 22-1381
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue Cash Funds $42,240 $42,240
Total Revenue $42,240 $42,240
Expenditures Cash Funds $4,975,505 $4,984,918
Centrally Appropriated $14,901 $18,280
Total Expenditures $4,990,406 $5,003,198
Total FTE 0.8 FTE 1.0 FTE
Transfers General Fund ($12,000,000) -
Cash Funds $12,000,000 -
Net Transfer $0 -
Other Budget Impacts TABOR Refund $42,240 $42,240 Page 2
July 20, 2022 HB 22-1381
Summary of Legislation
The bill creates a geothermal energy grant program in the Colorado Energy Office (CEO) to award
three types of grants:
single-structure geothermal grants for applicants constructing new buildings with geothermal
systems as the primary heating and cooling system;
community district heating grants for ground-source, water-source, or multisource thermal
systems that serve more than one building; and
geothermal electricity generation grants for the development of geothermal electricity generation
and hydrogen generation produced from geothermal energy.
Building owners, developers, local governments, geothermal installers, contractors, communities,
public utilities, or other entities approved by the CEO are eligible to apply for funding. The bill
establishes qualifications, limits, and standards for awarding the grants. Grantees must submit annual
reports to the CEO, and the CEO must submit annual reports by February 1 of each year beginning in
2024 to select legislative committees.
The bill creates the Geothermal Energy Grant Fund and transfers $12 million from the General Fund
to the fund, which is continuously appropriated to the CEO to implement the grant programs. The
CEO may award up to 40 percent of the total money in the fund to support the development of
geothermal electricity generation and hydrogen generation produced from geothermal energy; up to
80 percent to support single-structure geothermal grants; and up to 25 percent to support community
district heating grants.
Gas or electric service utilities that contribute to or partner with grant recipients may count
mass-based emissions reductions associated with the projects toward compliance with clean heat
targets and other greenhouse gas emission reduction requirements.
State Revenue
Beginning in FY 2022-23, this bill will increase state revenue to the Water Resources Cash Fund in the
Department of Natural Resources (DNR) from geothermal well permit fees. Current fee revenue to
the fund is estimated at $42,240, based on 88 permit applications annually and a $480 permit
application fee. Assuming this bill doubles permit applications for geothermal wells as a result of
grant funding, revenue to the fund is estimated to increase by $42,240 annually. Actual fee revenue
will depend on the number of applications filed.
State Transfers
In FY 2022-23, the bill transfers $12 million from the General Fund to the Geothermal Energy Grant
Fund.
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July 20, 2022 HB 22-1381
State Expenditures
From FY 2022-23 to FY 2025-26, the bill increases state expenditures in the CEO by about $5.0 million
annually from the Geothermal Energy Grant Fund, and will increase workload in other state agencies.
Expenditures are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 22-1381
FY 2022-23 FY 2023-24
Colorado Energy Office
Personal Services $76,716 $92,059
Operating Expenses $1,080 $1,350
Capital Outlay Costs $6,200 -
Grants Management Software $5,000 $5,000
Grants Contractor $450,000 $450,000
Grant Funding $4,436,509 $4,436,509
Centrally Appropriated Costs
1
$14,901 $18,280
Total Cost $4,990,406 $5,003,198
Total FTE 0.8 FTE 1.0 FTE
Colorado Energy Office. The CEO will hire 1.0 FTE program manager to establish and oversee the
grant program and third-party contractor, and to assist with stakeholder engagement and outreach.
The CEO will incur grants management software costs of $5,000 annually, and will hire a contractor
to administer the program and provide technical support at a cost of $450,000 per year. Standard
operating and capital outlay costs are included, and assume a September 1 start date. Assuming funds
are spent over a three-year timeframe, around $4.4 million will be spent annually on grant awards in
the first two years, with the remainder spent in the third year, which is the amount remaining after
administrative costs.
Department of Natural Resources. To the extent that grant applicants will need to apply for
geothermal well permits, workload for the DNR will increase. Each permit application is estimated
to require 1 hour of staff resources. The DNR may also have to certify geothermal system installers
and amend rules for permit applications. This fiscal note assumes this workload can be accomplished
within existing resources.
Department of Public Health and Environment. The Department of Public Health and Environment
will incur workload impacts to review calculated emissions reductions from geothermal projects for
the purposes of clean heat requirements. This fiscal note assumes this workload can be accomplished
within existing resources.
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July 20, 2022 HB 22-1381
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated
with this bill are addressed through the annual budget process and centrally appropriated in the Long
Bill or supplemental appropriations bills, rather than in this bill. These costs, which include employee
insurance and supplemental employee retirement payments, are shown in Table 2.
Other Budget Impacts
TABOR refunds. The bill is expected to increase the amount of state revenue required to be refunded
to taxpayers by approximately $42,240 per year. This estimate assumes the March 2022 LCS revenue
forecast. A forecast of state revenue subject to TABOR is not available beyond FY 2023-24. Because
TABOR refunds are paid from the General Fund, increased cash fund revenue will reduce the amount
of General Fund available to spend or save.
Local Government
To the extent that local governments apply for and are awarded grant funding, their workload,
revenue, and expenditures will increase.
Effective Date
The bill was signed into law by the Governor on June 2, 2022, and takes effect on August 9, 2022,
assuming no referendum petition is filed.
State and Local Government Contacts
Colorado Energy Office Counties
Information Technology Law
Municipalities Natural Resources
Public Health and Environment
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.