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January 27, 2023 HB 23-1069
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0267
Rep. McCormick
Sen. Cutter
Date:
Bill Status:
Fiscal Analyst:
January 27, 2023
House Energy & Environment
Matt Bishop | 303-866-4796
matt.bishop@coleg.gov
Bill Topic: STUDY BIOCHAR IN PLUGGING OF OIL & GAS WELLS
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill creates an advisory group to study the use of biochar in plugging oil and gas
wells. It increases state expenditures in the current FY 2022-23 and FY 2023-24, and
may increase state revenue and local workload.
Appropriation
Summary:
For the current FY 2022-23 and FY 2023-24, the bill requires a total appropriation of
$111,200. See the State Appropriations section for detail.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 23-1069
Current Year
FY 2022-23
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - - -
Expenditures Cash Funds up to $100,000 $11,200 -
Total Expenditures up to $100,000 $11,200 -
Transfers - - -
Other Budget Impacts
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January 27, 2023 HB 23-1069
Summary of Legislation
The bill creates the Biochar in Oil and Gas Well Plugging Working Advisory Group in the Colorado
Oil and Gas Conservation Commission (COGCC). Biochar is a type of charcoal produced by burning
organic material in a form that resists decay in order to sequester its carbon content. The advisory
group consists of representatives of COGCC, other state agencies, the federal government, local
government, private industry, academia, and environmental advocacy. Appointments must be made
by July 1, 2023. Advisory group members serve without compensation but are eligible for expense
reimbursement.
The advisory group must research the use of biochar in plugging oil and gas wells, including scientific
articles and existing federal or state regulations. It may recommend the development of a pilot
program to further study biochar, identify how such well-plugging may be implemented, and monitor
emissions from selected oil and gas wells. COGCC provides administrative support to the advisory
group, which must submit a draft report on its recommendations to the COGCC by September 1, 2023.
If the recommendations include implementing a pilot program, the advisory group’s final report must
be published by December 1, 2023, and presented to the legislature by February 1, 2024.
State Revenue
The bill potentially increases state revenue to the Oil and Gas Conservation and Environmental
Response Fund from gifts, grants, or donations; however, no sources have been identified at this time.
Gifts, grants, and donations are exempt from TABOR revenue limits.
State Expenditures
The bill increases state expenditures in the Department of Natural Resources by up to $100,000 in the
current FY 2022-23 and $11,200 in FY 2023-24, paid from the Oil and Gas Conservation and
Environmental Response Fund. Expenditures are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 23-1069
FY 2022-23 FY 2023-24 FY 2024-25
Department of Natural Resources
Contractor $100,000 - -
Travel Reimbursements - $11,200 -
Total Cost $100,000 $11,200 -
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January 27, 2023 HB 23-1069
DNR. The bill increases workload in the COGCC to administer the advisory group and submit
recommendations to the legislature.
Contractor. COGCC will hire a contractor to facilitate meetings of the advisory group and to
prepare its final report. Based on the reporting deadlines in the bill and similar reporting
requirements on COGCC, the contract is estimated to cost up to $100,000. Because the advisory
group begins meeting in July 2023, the fiscal note assumes that COGCC must solicit the contract
before this date, with contract expenditures occurring in both the current FY 2022-23 and
FY 2023-24.
Travel reimbursements. Advisory group members, who serve without compensation, are
entitled to reimbursement for actual expenses incurred for participating. The fiscal note assumes
that the 14-member advisory group will meet four times, with average expenses of $200 per person
per meeting.
State agencies serving on the advisory group. Workload will increase in state agencies that serve on
the advisory group. This workload can be accommodated within existing appropriations.
Local Government
Similar to the state, workload will increase for any local government represented on the advisory
group. This workload is expected to be minimal.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
For FY 2022-23, the bill requires an appropriation of $100,000 to the Department of Natural Resources
from the Oil and Gas Conservation and Environmental Response Fund. Based on the anticipated
timeline for the contractor, it is assumed that the DNR will require roll-forward spending authority of
this appropriation through FY 2023-24.
For FY 2023-24, the bill requires an appropriation of $11,200 to the Department of Natural Resources
from the Oil and Gas Conservation and Environmental Response Fund.
State and Local Government Contacts
Colorado Energy Office Counties Forest Service
Governor's Office Information Technology Legislative Council Staff
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.