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April 18, 2023 HB 23-1294
1294 Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0131
Rep. Bacon; Willford
Sen. Winter F.; Gonzales
Date:
Bill Status:
Fiscal Analyst:
April 18, 2023
House Energy & Environment
Matt Bishop | 303-866-4796
matt.bishop@coleg.gov
Bill Topic: POLLUTION PROTECTION MEASURES
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill updates procedures and requirements for air quality control regulations. It
increases state expenditures on an ongoing basis.
Appropriation
Summary:
For FY 2023-24, the bill requires appropriations of $11.3 million dollars. See State
Appropriations Section.
Fiscal Note
Status:
The fiscal note reflects the introduced bill. This analysis is preliminary and will be
updated following further review and any additional information received.
Table 1
State Fiscal Impacts Under HB 23-1294
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue - -
Expenditures General Fund $9,867,206 $9,868,191
Cash Funds $1,209,711 $1,098,600
Centrally Appropriated $202,733 $202,733
Total Expenditures $11,279,650 $11,169,524
Total FTE 111.4 FTE 119.5 FTE
Transfers - -
Other Budget Impacts General Fund Reserve $1,408,081 $1,408,229
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April 18, 2023 HB 23-1294
Summary of Legislation
The bill updates procedures and requirements for how the Air Quality Control Commission in the
Department of Public Health and Environment (CDPHE) and the Colorado Oil and Gas Conservation
Commission in the Department of Natural Resources (DNR) regulate pollution control measures.
Air Quality Control Commission—rulemaking and permitting. When a person files an air pollution
emission notice for a nonresidential structure, the bill requires that any relevant permits have been
approved by CDPHE and that any applicable period of review by the federal Environmental
Protection Agency (EPA) has been completed.
The bill allows the commission to adopt rules covering indirect sources that are more stringent than
federal law, and it creates new electrification requirements and emissions standards for stationary
engines used in oil and gas operations.
The bill updates the department’s public notice requirements for certain construction permit
applications, renewable operating permit applications, and public hearings.
When CDPHE makes a finding that an activity will meet all applicable emission control regulations,
if the activity may emit levels of air contaminants above certain modeling thresholds, the bill requires
CDPHE to base the finding on air quality modeling beginning January 1, 2024.
The bill specifies new control measures that must be included in any state implementation plan for
ozone until the EPA redesignates a serious, severe, or extreme ozone nonattainment area as a
maintenance area.
When CDPHE evaluates a construction permit application for new oil and gas operations, it must
aggregate emissions from the oil and gas systems and consider emissions from exploration and
preproduction activities if the system is in an ozone nonattainment area and the activities will be
conducted beginning during ozone season.
Air Quality Control Commission—violations and enforcement. The bill removes the requirement
that the commission set conditions and limitations for periods of start-up, shutdown, or malfunction
of a source of air pollution that justify temporary relief from an emission control regulation.
The bill specifies that only the filing of a renewable operating permit application can operate as a
defense to an enforcement action for operating without a permit during the time period that the
CDPHE is reviewing the permit application.
The bill expands CDPHE’s authority to initiative investigations on noncompliance and specifies
timeframes for notification and resolution of any investigation and or hearings requested following a
compliance order. The bill also allows a person to commence a civil action against an alleged violator
of certain clean air regulation, after notifying CDPHE and the alleged violator. After an investigation
into whether an activity meets the requirements of a construction permit, CDPHE may propose
additional terms and conditions of the construction permit. When determining the amount of a civil
penalty, CDPHE must also consider the impact on safety and wildlife and biological resources and
the severity of the violation. Page 3
April 18, 2023 HB 23-1294
Colorado Oil and Gas Conservation Commission. A person may submit a complaint to the
commission alleging a violation related to oil and gas regulation. The commission must then conduct
an investigation, unless the complaint appears to be trivial or is withdrawn.
The commission must evaluate and address adverse cumulative impacts of new or substantially
modified oil and gas locations on the environment and disproportionately impacted communities.
State Expenditures
The bill increases state expenditures in CDPHE by $9.9 million in FY 2023-24 and FY 2024-25, paid
from the General Fund. It also increases state expenditures in DNR by $1.4 million in FY 2023-24 and
$1.3 million in FY 2024-25, 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 23-1294
FY 2023-24 FY 2024-25
Department of Public Health and Environment
Personal Services $5,804,595 $6,332,285
Operating Expenses $135,000 $135,000
Capital Outlay Costs $667,000 -
Legal Services $1,712,988 $1,712,988
Employee Benefits $1,547,623 $1,687,918
FTE – Personal Services 91.7 FTE 100.0 FTE
FTE – Legal Services 9.0 FTE 9.0 FTE
CDPHE. Subtotal $9,867,206 $9,868,191
Department of Natural Resources
Personal Services $987,819 $987,819
Operating Expenses $13,500 $13,500
Capital Outlay Costs $66,700
-
Legal Services $141,692 $97,281
Centrally Appropriated Costs
1
$202,733 $202,733
FTE – Personal Services 10.0 FTE 10.0 FTE
FTE – Legal Services 0.7 FTE 0.5 FTE
Dept. Subtotal $1,412,444 $1,301,333
Total $11,279,650 $11,169,524
Total FTE 111.4 FTE 119.5 FTE
1
Centrally appropriated costs are not included in the bill's appropriation for DNR. Page 4
April 18, 2023 HB 23-1294
Department of Public Health and Environment. The bill increases expenditures to conduct
substantial rulemaking, increase permit review, investigate complaints, conduct additional air quality
modeling, and conduct additional enforcement activities.
Staffing. Implementing the requirements above requires approximately 100.0 FTE beginning in
FY 2023-24 in the Air Quality Control Commission. This estimate will be refined in a future fiscal
note. Standard operating and capital outlay costs are included, and costs in FY 2023-24 have been
prorated for the General Fund pay date shift.
Legal services. CDPHE requires 16,200 hours of legal services for rulemaking, general counsel,
and enforcement support annually beginning in FY 2023-24. Legal services are provided by the
Department of Law at a rate of $105.74 per hour.
Employee insurance and supplemental retirement. Pursuant to fiscal note and Joint Budget
Committee policy, centrally appropriated costs for bills involving more than 20 FTE are
appropriated in the bill, rather than through the annual budget process. These costs include
employee insurance and supplemental employee retirement payments.
Department of Natural Resources. The bill increases expenditures to perform cumulative impacts
analysis on oil and gas permits, conduct additional analysis on permit applications, and conduct
investigations into alleged violations.
Staffing. Implementing the requirements above requires 10.0 FTE beginning in FY 2023-24,
including additional engineering, environmental protection, and management staff. Standard
operating and capital outlay costs are included.
Legal services. DNR requires 1,340 hours of legal services in FY 2023-24 and 920 hours in
FY 2024-25 for rulemaking, general counsel, and enforcement support. Legal services are
provided by the Department of Law at a rate of $105.74 per hour.
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
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve. Based on this fiscal note, the
bill is expected to increase the amount of General Fund held in reserve by the amounts shown in
Table 1, decreasing the amount of General Fund available for other purposes.
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April 18, 2023 HB 23-1294
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:
$9,867,206 from the General Fund to the Department of Public Health and Environment, and
91.7 FTE. Of this, $1,712,988 is reappropriated to the Department of Law, with 9.0 FTE; and
$1,209,711 from the Oil and Gas Conservation and Environmental Response Fund, and 10.0 FTE.
Of this, $141,692 is reappropriated to the Department of Law, with 0.7 FTE.
State and Local Government Contacts
Judicial Law 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.