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February 28, 2023 HB 23-1069
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces the fiscal note dated January 27, 2023)
Drafting Number:
Prime Sponsors:
LLS 23-0267
Rep. McCormick
Sen. Cutter
Date:
Bill Status:
Fiscal Analyst:
February 28, 2023
House Appropriations
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 a work group to study the use of biochar in plugging oil and gas wells.
It increases state expenditures in FY 2023-24, may increase state expenditures in
FY 2024-25, and may increase state revenue and local workload.
Appropriation
Summary:
For FY 2023-24, the bill requires appropriations totaling $375,740 to the Department
of Higher Education for Colorado State University and to the Department of Natural
Resources.
Fiscal Note
Status:
The revised fiscal note reflects the introduced bill, as amended by the House Energy
and Environment Committee.
Table 1
State Fiscal Impacts Under HB 23-1069
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - -
Expenditures General Fund $370,140 $175,065
Cash Funds $5,600 $5,600
Total Expenditures $375,740 $180,665
Total FTE 3.0 FTE 1.5 FTE
Transfers - -
Other Budget Impacts General Fund Reserve $55,521 $26,260
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February 28, 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) in the Department of Natural Resources (DNR).
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 work 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. Work group members serve without
compensation but are eligible for expense reimbursement.
The bill directs Colorado State University (CSU) to research the use of biochar in plugging oil and gas
wells, including studying scientific articles and existing federal or state regulations and conducting
laboratory research. By June 1, 2024, CSU must submit a final report on its recommendations to the
work group. If the work group determines that a pilot program to study the use of biochar is
warranted, CSU must make recommendations regarding the development of a program by December
15, 2024. Recommendations must include standards for using biochar to plug oil and gas wells,
selecting study sites, monitoring emissions, comparing data, estimating program costs, and preparing
a detailed plan for implementation of the program by COGCC. The bill is repealed September 1, 2025.
State Expenditures
The bill increases state expenditures, primarily in Colorado State University by $375,740 in FY 2023-24,
paid primarily from the General Fund. State expenditures may increase by $180,665 in FY 2024-25,
conditional on decisions made by the work group. Expenditures are shown in Table 2 and detailed
below.
Table 2
Expenditures Under HB 23-1069
FY 2023-24 FY 2024-25
Colorado State University
Personal Services $220,390 $110,195
Laboratory Equipment $72,000 $36,000
Indirect Costs $53,690 $26,845
FTE—Personal Services 3.0 FTE 1.5 FTE
CSU Subtotal $370,140 $175,065
Department of Natural Resources
Travel Reimbursements $5,600 $5,600
DNR Subtotal $4,400 $5,600
Total Cost $375,740 $180,665
Total FTE 3.0 FTE 1.5 FTE Page 3
February 28, 2023 HB 23-1069
Colorado State University. The bill increases expenditures for CSU to conduct the required research
of biochar and prepare the required reports for the work group. This requires 3.0 FTE post-doc
researchers beginning in FY 2023-24. If the work group requests recommendations for a pilot
program, these positions continue until December 31, 2024. These positions require laboratory
equipment to conduct the required research. Expenditures are paid from the General Fund.
Department of Natural Resources. Work group members, who serve without compensation, are
entitled to reimbursement from the COGCC for actual expenses incurred for participating, paid from
the Colorado Oil and Gas Conservation and Environmental Response Fund. The fiscal note assumes
that the 14-member work group will meet four times, with average expenses of $200 per person per
meeting.
State agencies serving on the work group. Workload will increase in state agencies that serve on the
work 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 work 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 2023-24, the bill requires the following appropriations:
$370,140 from the General Fund to the Department of Higher Education for use by the Board of
Governors of the Colorado State University System; and
$5,600 from the Oil and Gas Conservation and Environmental Response Fund to the Department
of Natural Resources.
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.