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January 17, 2023 SB 23-011
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0110
Sen. Winter F.
Rep. Boesenecker; Lindsay
Date:
Bill Status:
Fiscal Analyst:
January 17, 2023
Senate Transportation
Aaron Carpenter | 303-866-4918
Emily Dohrman | 303-866-3687
Bill Topic: MINOR DRIVER'S EDUCATION REQUIREMENTS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill requires anyone under the age of 21 to take a driver’s education course before
the individual can get an instructional permit or driver license. The bill also creates a
tax credit for individuals who pay for a driver’s education course. Starting in
FY 2023-24, the bill decreases state revenue and increases state expenditures on an
ongoing basis.
Appropriation
Summary:
For FY 2023-24, the bill requires appropriations totaling $893,855 to the Department
of Revenue.
Fiscal Note
Status:
The fiscal note reflects the introduced bill, which was recommended by the
Transportation Legislation Review Committee.
Table 1
State Fiscal Impacts Under SB 23-011
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue General Fund ($19.6 million) ($37.3 million)
Total Revenue ($19.6 million) ($37.3 million)
Expenditures General Fund $580,756 $382,356
Cash Funds $313,099 $100,885
Centrally Appropriated $152,359 $131,460
Total Expenditures $1,046,214 $614,701
Total FTE 9.4 FTE 8.1 FTE
Transfers - -
Other Budget Impacts TABOR Refund ($19.6 million) ($37.3 million)
General Fund Reserve $87,113 $57,353 Page 2
January 17, 2023 SB 23-011
Summary of Legislation
The bill creates a tax credit for purchasing driving school or training for a minor and changes the
requirements to receive a driver license and instructional permits for individuals under the age of 21.
Income tax credit. For tax years 2023 through 2032, the bill creates a state income tax credit for up to
$1,000 per student for qualifying taxpayers who incur certain driving instructional expenses on behalf
of a minor. Qualifying expenses include either a 30-hour driver education course approved by the
Department of Revenue (DOR) or 6 hours of behind-the-wheel training with a driving instructor. The
tax credit is refundable, meaning if the amount exceeds the taxpayer’s state income tax liability, the
balance is refunded to the taxpayer. The maximum credit amount is adjusted for inflation each income
tax year after 2023.
Driver license requirement. The bill changes the requirements to receive a Colorado driver license
for individuals under the age of 21. For individuals who are receiving their license at 18 or younger,
the bill adds the requirement that the individual successfully complete a 30-hour driver education
course that is approved by the DOR, and receive a minimum of 6 hours of behind-the-wheel training
with a driving instructor or 12 hours of behind-the-wheel training from a parent if no entity within
30 miles offers an approved training. For individuals 18 to 21, the bill adds the requirement that the
individual successfully complete a four-hour prequalification driver awareness program or a 30-hour
driver education course.
Instructional permit. The bill requires anyone under the age of 18 applying for an instructional permit
to complete a 30-hour driver education course and for individuals between the ages of 18 and 21 to
complete a 30-hour driver education course or a 4-hour prequalification driver awareness program.
Background checks. Finally, the bill requires commercial driving instructors to get a criminal
background check before providing behind-the-wheel instruction to a minor.
Background
Instruction permit. Under current law, anyone over the age of 16 may receive an instructional permit
without formal driving instruction. 15-year-olds are required to meet certain instruction
requirements, with individuals aged 15 to 15.5 year olds required the take the 30-hour driver
education course and individuals aged 15.5 years old to 16 years old required to take a four-hour
prequalification driver awareness program. For a complete list of requirements to receive an
instructional permit under current law, visit: https://dmv.colorado.gov/minor-permit.
Minor driver license. Under current law, a minor under the age of 16.5 must complete 6 hours of
behind-the-wheel driving with a driving instructor, as well as hold their permit for 12 months. Those
over the age of 16 and a half and younger than 18 do not require six hours of behind-the-wheel driving
but do need to have held a permit for 12 months. For complete list of requirements for a minor’s
license, visit: https://dmv.colorado.gov/minor-license#BTW%20Training. Table 2 outlines the change
to driver education requirements under the bill.
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January 17, 2023 SB 23-011
Table 2
Changes to Driver Education Requirements Under SB 23-011
1
To Receive a Permit To Receive a Driver License
Permit Age
Current
Law
Under
SB 23-011
License Age Current
Law
Under
SB 23-011
15 to 15.5 30-Hour DE 30-Hour DE 16 to 16.5 6-hour BTW 30-Hour DE AND
6-Hour BTW
2
15.5 to 16 30-Hour DE OR
4-hour DA
30-Hour DE 16.5 to 17 None 30-Hour DE AND
6-Hour BTW
16 to 17 None 30-Hour DE 17 None 30-Hour DE AND
6-Hour BTW
18 to 20 None 30-Hour DE OR
4-Hour DA
18 to 20 None 30-Hour DE OR
4-Hour DA
1
30-Hour DE refers to the 30-hour driver education course, 4-hour DA refers to the 4-hour driver awareness course,
and 6-hour BTW refers to the 6-hour behind-the-wheel training with an instructor.
2
6-hour behind-the-wheel training course can be substituted for with 12 hour behind-the-wheel training with a parent,
legal guardian or an alternate permit supervisor if no entities offer an approved training within 30 miles.
Assumptions
The fiscal note assumes that the state’s approximately 750 commercial driving instructors already
undergo fingerprint background checks that review an individual’s criminal history; therefore, no
revenue or expenditure impact from background checks is anticipated.
State Revenue
Tax credit for driving instruction. The bill is expected to decrease General Fund revenue by
$19.6 million in FY 2023-24 (half-year impact), by $37.3 million in FY 2024-25, and by increasing
amounts, due primarily to inflation, for each full year through FY 2031-32. The credit will repeal in
FY 2032-33, in which a half-year impact will occur. The bill reduces individual income tax revenue,
which is subject to TABOR. Credits claimed and costs per credit are shown in Table 3.
Table 3
State Revenue Impacts Under SB 23-011
1
Tax Year 2024 Tax Year 2025
Credits
Claimed
Avg. Credit
Amount
Total
Reduction
Credits
Claimed
Avg. Credit
Amount
Total
Reduction
30-Hour Driver’s
Education Class
97,000 $180 $17.5 million 66,000 $185 $12.2 million
6-Hour Behind-the-
Wheel Training
47,000 $461 $21.5 million 47,000 $473 $22.1 million
Tax Year Total
144,000
$39.0 million 113,000
$34.3 million
Fiscal Year Total FY 2023-24: $19.6 million FY 2024-25: $37.3 million
1
Totals may not sum due to rounding. Tax year totals are based on the calendar year; fiscal year totals allocate
tax revenue based on the state fiscal year, which runs from July 1 to June 30 each year. Page 4
January 17, 2023 SB 23-011
Assumptions. The fiscal note assumes that taxpayers will claim the credit for about 144,000 minor
drivers in calendar year 2023, and about 113,000 minor drivers in calendar year 2024 and similar
numbers thereafter. In the first year, about 70 percent of credits are assumed to be claimed for the
30-hours driving course and 30 percent for behind-the-wheel training; in future years, this split is
assumed to be approximately 60 percent and 40 percent, respectively. The fiscal note further assumes
that the average credit claimed will be $180 for the 30-hour driving course (including online options)
and $461 for the 6 hours of behind-the-wheel training based on data from a sample of 2022 prices
listed by state-approved driving schools. These costs are adjusted for inflation for each year using
estimates published in the December 2022 forecast. In determining the instructional costs that may be
claimed for the credit, the costs of written and driving tests, which are included in many driving
instruction packages, are excluded as these are assumed to not be qualified expenses under the bill.
If the new requirements result in fewer minors under age 18 seeking a permit or license, if the cost of
driving instruction is less than assumed, or if a larger number of minors meet the qualifications for
parental- or guardian-supervised behind-the-wheel training, the bill will decrease revenue by less
than estimated. If the refundable income tax credit creates an incentive for more minors to obtain a
permit or driving license or if the cost of driving courses and behind-the-wheel driving instruction is
greater than assumed under this fiscal note, the bill will decrease revenue by more than estimated.
Additionally, if increased demand for driver education courses results in an increase in the price of
these courses, the bill will decrease revenue by more than estimated.
Permit and licensing fees. To the extent that changing the requirements to receive an instructional
permit or driver licenses decreases the number of individuals eligible to receive a permit or license,
revenue to the DOR will decrease. The exact number of individuals who would not get a permit or
license under the bill cannot be determined at this time.
State Expenditures
The bill increases state expenditures in the DOR by $1.0 million in FY 2023-24 and $614,700 in
FY 2024-25, with costs paid from the General Fund and the DRIVES Vehicle Services Account.
Expenditures are shown in Table 4 and detailed below.
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January 17, 2023 SB 23-011
Table 4
Expenditures Under SB 23-011
Cost Components FY 2023-24 FY 2024-25
Department of Revenue – Division of Motor Vehicles
Personal Services $118,966 $98,455
Operating Expenses $2,970 $2,430
Capital Outlay Costs $20,010 -
Computer Programming $171,153
-
Centrally Appropriated Costs
1
$35,368
$29,042
FTE – Personal Services 2.2 FTE 1.8 FTE
DMV Subtotal (DRIVES Vehicle Services Account) $348,467
$129,927
Department of Revenue – Tax Division (GF)
Personal Services $402,551 $352,775
Operating Expenses $11,070 $8,505
Capital Outlay Costs $73,370 -
Computer Programming/Reporting $79,636 $7,328
Form Changes $14,129 $13,748
Centrally Appropriated Costs
1
$116,991 $102,418
FTE – Personal Services 7.2 FTE 6.3 FTE
Tax Division Subtotal (General Fund) $697,747 $484,774
Total $1,046,214 $614,701
Total FTE 9.4 FTE 8.1 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Division of Motor Vehicles. Starting in FY 2023-24, expenditures in the Division of Motor Vehicles
in the DOR will increase to audit additional documents and to makes changes to the department’s
Driver License, Record, Identification, and Vehicle Enterprise Solutions (DRIVES) system.
Auditing license and permit documentation. The Division of Motor Vehicles will require 2.9 FTE
in FY 2023-24 and 1.8 FTE in FY 2024-25 and ongoing to audit additional documents to ensure that
minors are completing the requirements for a license or permit under the bill. Staffing assumes
that the division will receive around 250,000 additional documents in FY 2023-24 and
154,000 additional documents in FY 2024-25 and in future years and that 1.0 FTE can review
around 90,000 documents per year. Costs in FY 2023-24 are prorated for an October 1 start date.
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January 17, 2023 SB 23-011
DRIVES programming. In FY 2023-24, the DOR will be required to update DRIVES to eliminate
the current tiered system for driver education and testing, and to program the system to meet the
new identification requirements under the bill. Programming costs are calculated at 608 hours at
a rate of $225 per hour for a total cost of $136,800. In addition, programming and testing within
the innovation strategy and delivery team, which maintains the DRIVES system, will cost
$34,353, which is reappropriated to the Office of Information Technology.
Tax Division. Expenditures in the Tax Division within the DOR will increase to administer the tax
credit, to update the GenTax system, and make form changes.
Tax credit administration. The Tax Division will require 6.2 FTE in FY 2023-24 and 6.3 FTE in
FY 2024-25 to administer the tax credit based on current DOR staff levels. Staff will review and
verify credits and correspond with taxpayers to ensure that required information is verified. Costs
in FY 2024-25 are prorated for a October 1 start date and the General Fund pay date shift.
GenTax programming. The DOR requires 1.0 FTE to program, test, and update database fields
in the DOR's GenTax software system. GenTax programming costs are estimated at $72,244,
which includes 180 hours of contract programming at a rate of $225 per hour, and 992 hours of
user acceptance testing at a rate of $32 per hour. These are one-time costs.
Expenditures in the Office of Research and Analysis are also required for changes in the related
GenTax reporting system so that the department can access and document tax statistics related to
the new tax policy. These costs are estimated at $7,392, representing 231 hours for data
management and reporting at $32 per hour. These costs are ongoing.
Form changes. The DOR will make changes to its tax forms. The changes are expected to cost
$14,129 in FY 2023-24 and $13,748 in FY 2024-25. This work will be performed by the Department
of Personnel and Administration using reappropriated funding from DOR.
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, which will decrease the amount of General Fund available for other purposes.
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January 17, 2023 SB 23-011
TABOR refunds. The bill is expected to decrease the amount of state revenue required to be refunded
to taxpayers by the amounts shown in the State Revenue section above. This estimate assumes the
December 2022 LCS revenue forecast. A forecast of state revenue subject to TABOR is not available
beyond FY 2024-25. Because TABOR refunds are paid from the General Fund, decreased General
Fund revenue will lower the TABOR refund obligation, but result in no net change to the amount of
General Fund otherwise available to spend or save.
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 the following appropriations to the Department of Revenue:
$580,756 from the General Fund, and 7.2 FTE, with $14,129 reappropriated to the Department of
Personnel and Administration; and
$313,099 from the DRIVES Vehicle Services Account, and 2.2 FTE, with $34,353 reappropriated to
the Office of Information Technology.
State and Local Government Contacts
Information Technology Judicial Personnel
Public Safety Revenue State Auditor
Transportation
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.