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February 14, 2023 HB 23-1161
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0016
Rep. Kipp; Willford
Sen. Cutter
Date:
Bill Status:
Fiscal Analyst:
February 14, 2023
House Energy & Environment
Kristine McLaughlin | 303-866-4776
kristine.mclaughlin@coleg.gov
Bill Topic: ENVIRONMENTAL STANDARDS FOR APPLIANCES
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill sets environmental standards on certain appliances and requires the Colorado
Department of Public Health and Environment to conduct compliance inspections. The
bill increases state expenditures, and may increase state revenue, on an ongoing
basis starting in FY 2023-24.
Appropriation
Summary:
For FY 2023-24, the bill requires an appropriation of $1,395,734 to the Colorado
Department of Public Health and Environment.
Fiscal Note
Status:
This fiscal note reflects the introduced bill. Due to time constraints, this analysis is
preliminary and will be updated following further review and any additional information
received.
Table 1
State Fiscal Impacts Under HB 23-1161
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - -
Expenditures General Fund $1,395,734 $429,020
Centrally Appropriated $44,226 $56,768
Total Expenditures $1,439,960 $485,788
Total FTE 2.5 FTE 3.1 FTE
Transfers - -
Other Budget Impacts General Fund Reserve $209,360 $64,353
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February 14, 2023 HB 23-1161
Summary of Legislation
The bill expands the list of appliances subject to statutory Water and Energy Efficiency Standards, and
requires the Colorado Department of Public Health and Environment (CDPHE) to update the list and
promulgate other rules as necessary every five years beginning January 1, 2026.
The bill phases in prohibitions on the manufacture, distribution, or sale of certain fluorescent lights
and heating appliances. Manufacturers of heating appliances are subject to disclosure and testing
requirements. The Air Quality Control Commission in CDPHE is required to lower the emission
limits for new water heaters, boilers, and certain furnaces by 2029.
The bill requires CDPHE to conduct inspections of at least five major sellers, every five years, for
compliance with regulations on at least five different products from each of the three affected category
of products—plumbing fixtures, fluorescent lights, and heating appliances—and deliver the findings
to the Attorney General. In total, the bill requires CDPHE to inspect 75 products from 15 sellers every
five years, which averages to 15 products from 3 sellers annually.
State Revenue
Civil penalties. The bill imposes a civil penalty of not more than $2,000 for each transaction or online
for-sale product listing to any person who sells or offers to sell any new consumer product that is
subject to the efficiency standards. The bill requires CDPHE to inspect products for compliance and
submit findings to the Attorney General, which may result in an increase in caseload and revenue
from penalties. This revenue is classified as a damage award and not subject to TABOR. Given the
uncertainty about the number of cases that may be pursued by the Attorney General and district
attorneys, as well as the wide range in potential penalty amounts, the fiscal note cannot estimate the
potential impact of these civil penalties.
State Expenditures
The bill increases state expenditures in Colorado Department of Public Health and Environment by
approximately $1.4 million in FY 2023-24 and $500,000 in FY 2024-25, paid from the General Fund.
Additionally, the bill increases workload in the Department of Law. Expenditures are shown in Table
2 and detailed below.
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February 14, 2023 HB 23-1161
Table 2
Expenditures Under HB 23-1161
FY 2023-24 FY 2024-25
Department of Public Health and Environment
Personal Services $189,886 $253,182
Operating Expenses $3,240 $4,050
Capital Outlay Costs $20,010 -
Legal Services $19,033 $19,033
Computer Programing $1,163,565 $152,755
Centrally Appropriated Costs
1
$44,226 $56,768
FTE – Personal Services 2.4 FTE 3.0 FTE
FTE – Legal Services 0.1 FTE 0.1 FTE
Total Cost $1,439,960 $485,788
Total FTE 2.5 FTE 3.1 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Colorado Department of Public Health and Environment. The bill impacts the CDPHE in two ways:
it requires the CDPHE to promulgate rules to update environmental standards for appliances and to
inspect a sample of appliances for compliance. Personnel costs associated with each of these impacts
are detailed below. Standard operating and capital outlay costs are included. These costs are prorated
to account for the General Fund pay date shift and the bill’s effective date. Additionally, system
changes and legal services are required and detailed.
Rulemaking. CDPHE requires 1.0 FTE to conduct regular research around environmental
standards and promulgate rules as result of the findings. The fiscal note assumes that CDPHE is
not required to go through its usual stakeholder engagement process but can instead rely on work
done in other states and at the federal level. Costs are associated with research done at that level.
Inspections. CDPHE requires 1.0 FTE to conduct compliance inspections. The fiscal note assumes
that CDPHE will inspect five individual items per product resulting in 375 inspections every five
years or 75 inspections annually.
Additional personal services. CDPHE requires 1.0 FTE as administrative support for these
processes. CDPHE does currently inspect any products. New administrative support is needed
for CDPHE to establish and maintain a system capable of performing this new task. This position
will also assist in rulemaking to ensure the process can support any new rules.
Computer programming. CDPHE requires about 6,000 hours of system changes services in FY
2023-24 and about 1,200 hours thereafter, at a cost of about $1.2 million in FY 2023-24 and $150,000 Page 4
February 14, 2023 HB 23-1161
per year thereafter. Computer programing services are provided by the Office of Information
Technology at a rate of $195 per hour in the first year and about $130 thereafter. The system will
allow for regular updating of publically available rules, anonymous reporting of violations, and
submissions of findings to the Attorney General.
Legal services. CDPHE will require 180 hours of legal services at a cost of about $20,000 per year
to support rulemaking. Legal services are provided by the Department of Law at a rate of $105.74
per hour.
Department of Law. The bill minimally increases workload in the Department of Law to the extent
that violations are discovered through the inspection process. The department will review violations
under the bill and prioritize investigations as necessary within and available resources.
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.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State Appropriations
For FY 2023-24, the bill requires an appropriation of $1,395,734 and 3.0 FTE to the Colorado
Department of Public Health and Environment to be paid from the General Fund.
Departmental Difference
CDPHE estimates the bill requires $1,639,581 and 6.3 FTE in FY 2023-24 and $1,429,589 and 15.1 FTE
in FY 2024-25, paid from the General Fund, assuming that the rulemaking requirements in the bill will
trigger their formal rulemaking process and that the inspections will require significant time beyond
physically conducting the inspections. As discussed in the State Expenditures section, the fiscal note
uses different assumptions about rulemaking and inspection requirements.
State and Local Government Contacts
Law Public Health and Environment Regulatory Agencies
Secretary of State Information Technology
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.