Page 1
April 21, 2023 SB 23-280
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 17, 2023)
Drafting Number:
Prime Sponsors:
LLS 23-0270
Sen. Mullica
Rep. Snyder
Date:
Bill Status:
Fiscal Analysts:
April 21, 2023
Senate Appropriations
Matt Bishop | 303-866-4796
matt.bishop@coleg.gov
Emily Dohrman | 303-866-3687
emily.dohrman@coleg.gov
Bill Topic: HAZARDOUS MATERIAL MITIGATION
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill creates an enterprise, two grant programs, and an income tax credit, among
other changes, to address hazardous materials transportation and vehicle emissions.
It increases state and local revenue and expenditures beginning in FY 2023-24.
Appropriation
Summary:
For FY 2023-24, the bill requires an appropriation of $576,346 to the Department of
Revenue. See State Appropriations section.
Fiscal Note
Status:
This revised fiscal note reflects the introduced bill, as amended by the Senate Finance
Committee.
Table 1
State Fiscal Impacts Under SB 23-280
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue General Fund $14,000 $9,000
Cash Funds $16.8 million $22.7 million
Net Revenue $16.8 million $22.7 million
Expenditures General Fund $576,346 $7,328
Cash Funds $16,672,256 $17,958,128
Centrally Appropriated $87,286 $54,130
Total Expenditures $17,335,888 $18,019,586
Total FTE 6.1 FTE 3.9 FTE
Transfers Petroleum ST Fund (up to $500,000) (up to $500,000)
Petroleum C&R Fund up to $500,000 up to $500,000
Net Transfer $0 $0
Other Budget Impacts TABOR Refund $14,000 $9,000
General Fund Reserve $86,452 $1,099 Page 2
April 21, 2023 SB 23-280
Summary of Legislation
The bill makes a number of changes to address hazardous materials transportation and vehicle
emissions, including creating an enterprise, two grant programs, and an income tax credit. The
changes in the bill are discussed below.
Fuels Impact Enterprise. The bill creates the Fuels Impact Enterprise in the Department of
Transportation (CDOT) to improve the transportation of fuel and monitor vehicle emissions. The
enterprise repeals January 1, 2030.
Fuel impacts reduction fee. Beginning September 1, 2023, the enterprise will impose a fuels
impact reduction fee of up to 0.6125 cents per gallon of fuel on licensed fuel excise tax distributors
and licensed fuel distributors.
Grant program. The enterprise will administer the Fuel Impacts Reduction Grant Program, which
makes grants to certain communities, governments, and transportation corridors for improving
hazardous mitigation corridors and projects related to emergency responses, environmental
mitigation, or fuel transportation.
Cash fund. The bill creates the Fuels Impact Enterprise Cash Fund, which consists of fuels impact
reduction fee revenue, any federal money received by the enterprise, and any gifts, grants, or
donations. The fund is continuously appropriated to the enterprise, and the fund balance is
limited to $15 million.
Grant program and heavy-duty diesel vehicle registration. The bill creates the Diesel Truck
Emissions Reduction Grant Program in CDPHE to provide grants for decommissioning and replacing
older diesel trucks. The grants are funded by a new registration fee on heavy-duty diesel vehicles.
The fee amount depends on model year of the vehicle and how much the vehicle is driven in Colorado.
Fee revenue is credited to the newly created Clean Fleet Enterprise Diesel Truck Emissions Reduction
Grant Program Cash Fund, which is continuously appropriated to the Clean Fleet Enterprise in
CDPHE to administer the grant program. The bill specifies the program’s application and reporting
requirements of truck owners, and CDPHE’s reporting requirements to the General Assembly.
Enterprise zone commercial vehicle investment tax credit. The bill eliminates the existing enterprise
zone commercial vehicle investment tax credit beginning in tax year 2024. The credit is currently
available for purchases of commercial trucks, truck tractors, tractors, and semi-trailers weighing
54,000 pounds or more that are model year 2010 or newer. The credit is equal to 1.5 percent of the
total investment of the purchase.
Clean commercial truck tax credit. The bill replaces the existing enterprise zone commercial vehicle
investment tax credit with a new, refundable tax credit for the conversion, lease, or purchase of a clean
truck beginning in tax year 2024. To claim the credit, a taxpayer must purchase, lease, or convert a
clean truck that is part of a motor vehicle fleet, and must be located within an enterprise zone. The
credit amounts are shown in Table 2.
Page 3
April 21, 2023 SB 23-280
Table 2
Clean Commercial Truck Tax Credit by Type of Truck
Duty Fuel Types
Tax Years
2023-2025
Tax Years
2026-2029
Heavy-duty Hybrid or renewable fuel truck $10,000 $7,500
Medium-duty Hybrid or renewable fuel truck $5,000 $3,500
Light-duty Hybrid or renewable fuel truck $3,500 $1,500
Heavy-duty
Bi-fuel renewable, low nitrogen oxides, or
plug-in hybrid electric truck
$5,000 $3,750
Medium-duty
Bi-fuel renewable, low nitrogen oxides, or
plug-in hybrid electric truck
$2,500 $1,750
Light-duty
Bi-fuel renewable, low nitrogen oxides, or
plug-in hybrid electric truck
$1,750 $750
The credit is limited to the difference between the manufacturer’s suggested retail price and a
comparable traditional fuel truck or, for a conversion, the price of the conversion. A taxpayer who
purchase or leases a qualifying clean commercial truck may assign the tax credit to the financing entity
or motor vehicle dealer, and may not also claim the innovative truck credit allowed in current law for
the same tax year.
Petroleum and other fuel fees. Purchasers, manufacturers, and distributors of odorized liquefied
petroleum gas may pay a fee per tank truckload of fuel products delivered. The fee depends on the
balance of the Petroleum Storage Tank Fund. Under current law, no fee is required if the fund balance
exceeds $8 million; otherwise it is $25. Under current law, the fund balance limit is scheduled to repeal
on September 1, 2023, at which point fees increase. The bill extends the existing fee schedule for ten
years, until September 1, 2033.
Under current law, manufacturers and distributors of certain other fuel products also pay a fee of
$25 per tank truckload of fuel products delivered. The bill extends this fee, which is currently
scheduled to repeal September 1, 2026, until September 1, 2031. The bill also adjusts the formula by
which fee revenue is paid to support various state functions, as described in Table 3.
Page 4
April 21, 2023 SB 23-280
Table 3
Distribution of Fuel Product Fees
Recipient Current Law Under SB 23-280
Department of Public Safety for
the regulation of hazardous
materials on highways
$100,000 $2,000,000
Department of Revenue Administrative costs Administrative costs
Perfluoroalkyl and
Polyfluoroalkyl Substances
Cash Fund
75 percent of remaining revenue 70 percent of remaining revenue
Department of Transportation
for hazardous material safety
products
25 percent of remaining revenue 30 percent of remaining revenue
In current law, these fees are only collected if the balance of the Perfluoroalkyl and Polyfluoroalkyl
Substances Cash fund is less than $8 million. The bill increases this threshold to $9 million on
October 1, 2023. The bill extends CDPHE’s existing reporting requirements on the Perfluoroalkyl and
Polyfluoroalkyl Substances Cash Fund and related activities from 2027 to 2036.
Phasing out older diesel trucks for state projects. The bill establishes a schedule to phase out the use
of older diesel trucks at state project sites in ozone nonattainment areas. Diesel truck owners who
violate the restrictions are subject to a fine.
Petroleum regulations. The bill allows the Department of Labor and Employment (CDLE) to transfer
up to $500,000 annually from the Petroleum Storage Tank Fund to the Petroleum Cleanup and
Redevelopment Fund.
Current law allows certain owners and operators of underground or aboveground petroleum storage
tanks to access state funds for remediation. They must repay the state the lesser of the remediation
amount or $10,000. The bill allows CDLE to instead base the payment on a percentage of the
remediation amount.
State Revenue
The bill decreases state revenue beginning in FY 2023-24 from the new income tax credit, and increases
state revenue from the new fees on fuel distributors and diesel truck registrations. In total, revenue
will increase by about $16.8 million in FY 2023-24 and $22.7 million in FY 2024-25, as shown in Table 4
below and discussed below.
Page 5
April 21, 2023 SB 23-280
Table 4
Revenue Changes Under SB 23-280
Revenue Change FY 2023-24 FY 2024-25
Repeal Enterprise Zone Commercial Vehicle Investment Tax Credit $46,000 $96,000
Clean Commercial Truck Income Tax Credit ($32,000) ($87,000)
Fuel Distribution Fee $14,500,000 $19,500,000
Heavy-Duty Diesel Vehicle Registration Fee $2,347,500 $3,130,000
Net Revenue Change $16,861,500 $22,639,000
Enterprise Zone Commercial Vehicle Investment Tax Credit
Eliminating the current tax credit is expected to increase General Fund revenue by $46,000 in
FY 2023-24 (half-year impact) and $96,000 in FY 2024-25.
Clean Commercial Truck Income Tax Credit
The clean commercial truck income tax credit is expected to decrease revenue by $32,000 in FY 2023-24
(half-year impact) and $87,000 in FY 2024-25. Based on expected growth rates in clean vehicle
adoption and the share of vehicles expected to be purchased for fleets located in enterprise zones, the
credit in the bill is expected to be claimed for about 55 qualifying vehicles in tax year 2024 and
increasing amounts in future years.
For purchasers or lessees of electric trucks, the estimated amounts reflect the marginal value by which
the credit in the bill exceeds the current law innovative vehicle credit that taxpayers would otherwise
be able to claim through tax year 2025. Beginning in tax year 2026, the revenue impact of the credit
will increase because the innovative trucks credit in current law will no longer be available.
Table 5
Clean Commercial Truck Tax Credit
Fiscal Year Credits Claimed Revenue Impact
FY 2023-24 28 $32,000
FY 2024-25 71 $87,000
Fuel Distribution Fees—Fee Impact on Fuel Distributors
The Fuels Impact Enterprise will impose a fee of up to 0.6125 cents per gallon on distributors.
Colorado law requires legislative service agency review of measures which create or increase any fee
collected by a state agency. These fee amounts are estimates only, actual fees will be set
administratively by the Fuels Impact Enterprise based on cash fund balance, program costs, and the
amount of product subject to the fee. The table below identifies the fee impact of this bill. The fiscal
note assumes the maximum fee of 0.6125 cents per gallon. The total fuel estimate in FY 2023-24 is
prorated for nine months of the fiscal year based on the bill’s effective date. This revenue is not subject
to TABOR because it is collected by an enterprise.
Page 6
April 21, 2023 SB 23-280
Table 6
Fee Impact on Fuel Distribution
Fiscal Year Type of Fee Proposed Fee
Number of
Gallons Affected
Total Fee
Impact
FY 2023-24 Fuels Impact Reduction
Fee
$0.006125 2.37 billion $14.5 million
FY 2024-25 Fuels Impact Reduction
Fee
$0.006125 3.19 billion $19.5 million
Fee Impact on Heavy-Duty Diesel Vehicle Registrations
Colorado law requires legislative service agency review of measures which create or increase any fee
collected by a state agency. These fee amounts are estimates only, actual fees will be set
administratively by the Clean Fleet Enterprise based on cash fund balance, program costs, and the
number of registrations subject to the fee. The table below identifies the fee impact of this bill. The
fiscal note assumes the maximum fee levels, which are specified by the bill. Registrations in
FY 2023-24 are prorated for nine months of the fiscal year based on the bill’s effective date. This
revenue is not subject to TABOR because it is collected by an enterprise.
Table 7
Fee Impact on Heavy-Duty Diesel Vehicle Registrations
Fiscal Year
Type of
Fee
Proposed
Fee
Number
Affected
Total Fee
Impact
FY 2023-24 2010-2014 Models $30 12,000 $360,000
Older models $50 39,750 $1,987,500
FY 2023-24 Total $2,347,500
FY 2024-25 2010-2014 Models $30 16,000 $480,000
Older models $50 53,000 $2,650,000
FY 2024-25 Total $3,130,000
Gifts, Grants, And Donations
The bill potentially increases state revenue to the Fuels Impact Enterprise Cash 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 Transfers
Beginning in FY 2023-24, CDLE may transfer up to $500,000 annually from the Petroleum Storage
Tank Fund to the Petroleum Cleanup and Redevelopment Fund.
Page 7
April 21, 2023 SB 23-280
State Expenditures
The bill increases state expenditures by $17.3 million in FY 2023-24 and $18.0 million in FY 2024-25.
As shown in Table 8 and discussed below, these costs include:
$14.4 million in FY 2023-24 and $14.9 million in FY 2024-25 for CDOT, paid from the Fuels Impact
Enterprise Cash Fund;
$2.3 million in FY 2023-24 and $3.1 million in FY 2024-25 for CDPHE, paid from the Clean Fleet
Enterprise Diesel Truck Emissions Reduction Grant Program Cash Fund; and
$600,000 in FY 2023-24 and $7,000 in FY 2024-25 in the Department of Revenue (DOR), paid from
the General Fund.
Table 8
Expenditures Under SB 23-280
FY 2023-24 FY 2024-25
Department of Transportation
Personal Services $81,871 $98,246
Operating Expenses $1,080 $1,350
Capital Outlay Costs $6,670 -
Grants $14,300,000 $14,800,000
Centrally Appropriated Costs
1
$16,486 $20,223
FTE – Personal Services 0.8 FTE 1.0 FTE
CDOT Subtotal $14,406,107 $14,919,819
Department of Public Health and Environment
Personal Services $115,457 $138,549
Operating Expenses $2,160 $2,565
Capital Outlay Costs $13,340 -
Grants $1,900,000 $2,700,000
Legal Services $224,592 $190,332
Programming and Software $12,952 $12,952
Communications Materials $12,000 $12,000
Travel $2,134 $2,134
Centrally Appropriated Costs
1
$28,439 $33,907
FTE – Personal Services 1.6 FTE 1.9 FTE
FTE – Legal Services 1.2 FTE 1.0 FTE
CDPHE Subtotal $2,311,074 $3,092,439
Page 8
April 21, 2023 SB 23-280
Table 8
Expenditures Under SB 23-280 (Cont.)
FY 2023-24 FY 2024-25
Department of Revenue
Personal Services $158,307 -
Operating Expenses $3,375 -
Capital Outlay Costs $20,010 -
GenTax Programming $333,303 -
DRIVES Programming $29,912 -
Document Management $24,047 -
Office of Research and Analysis $7,392 $7,328
Centrally Appropriated Costs
1
$42,361 -
FTE – Personal Services 2.5 FTE -
DOR Subtotal $618,707 $7,328
Total $17,335,888 $18,019,586
Total FTE 6.1 FTE 3.9 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Transportation
Expenditures include administering the new Fuels Impact Enterprise, the associated grant program,
and updating its fleet.
Staffing. Administering the enterprise and awarding grants under the bill requires 1.0 FTE
beginning in FY 2023-24. Standard operating and capital outlay costs are included, and costs have
been prorated for the bill’s effective date.
Grant program. The total amount available in grant awards depends on the amount of fuels
impact reduction fee revenue collected, any revenue retained by the Department of Revenue for
its administrative expenses, and the number of applications for discretionary grants.
Fleet impacts. Phasing out older diesel trucks from state project sites may impact CDOT’s ability
to use some of its vehicles. CDOT estimates that it owns 188 trucks older than model year 2002,
and that the number older than model year 2010 may reach 400 by 2027. Costs to replace existing
assets vary by the type of vehicle. It is assumed funding to replace CDOT equipment will be
addressed through the annual budget process and that costs will be spread over multiple years as
necessary depending on prioritization of needs, asset availability, and available funding.
Page 9
April 21, 2023 SB 23-280
Department of Public Health and Environment
Expenditures increase in the Clean Fleet Enterprise to administer the Diesel Truck Emissions
Reduction Grant Program.
Staffing. The grant program requires an estimated 1.9 FTE to develop policies, market the
program, and to award and monitor grants. Standard operating and capital outlay costs are
included, and positions are prorated in FY 2023-24 for the bill’s effective date.
Other operating costs. Additional expenditures for the grant program include communication
materials, grants management software, some programming hours, and travel costs for grant
monitoring.
Grants. After administrative expenditures, the remaining revenue to the Clean Fleet Enterprise
Diesel Truck Emissions Reduction Grant Program Cash Fund from registration fees is available
for grants for decommissioning and replacing diesel trucks. This is estimated at $2.7 million
annually, prorated for the bill’s effective date in FY 2023-24. Actual expenditures for grants
depend on available revenue and the number of applications received.
State Fleet Vehicles
DPA manages the state fleet on behalf of state agencies. Similar to CDOT, expenditures for DPA may
increase to phase out older diesel trucks. The fiscal note assumes that the exceptions for routine
maintenance and travel make the number of replacements minimal. To the extent that DPA must
acquire new vehicles, it will make payments from the Motor Fleet Management Fund. Because this
fund is supported by allocations to state agencies, expenditures likewise increase for those agencies
based on their use of affected fleet vehicles. Any changes to revenue or expenditures will be addressed
through the annual budget process.
Department of Revenue
Expenditures increase to implement the new tax credit and the new registration fee.
GenTax programming and testing. In FY 2022-23 only, the bill requires changes to the DOR’s
GenTax system and additional computer and user acceptance testing. Approximately 1,111 hours
of computer programming are required to make changes in the GenTax system, totaling $249,975.
Additional computer and user acceptance testing are required to ensure programming changes
are functioning properly, resulting in an additional $83,328.
DRIVES programming and testing. In FY 2023-24, the bill requires one-time programming costs
of $29,912 to update the Driver License, Record, Identification and Vehicle Enterprise Solutions
(DRIVES) system with the new registration fee. Programming costs assume 108 hours at a rate of
$238 per hour. Testing can be accomplished within existing appropriations. Office of Information
Technology support requirements are estimated at 42.5 hours at a rate of $99 per hour, which will
be allocated to DOR and paid to OIT via real-time billing.
Document management. The bill requires an additional $24,047 in expenditures to implement
tax form changes in FY 2023-24. These expenditures will be reappropriated to the Department of
Personnel and Administration. Page 10
April 21, 2023 SB 23-280
Data reporting. Beginning in FY 2023-24, the Office of Research and Analysis within DOR will
expend about $7,400 each year to collect and report data on the new tax credit.
Other Expenditures Impacts
Distribution of fuel fees. Changing the distribution of fuel fee revenue among the Department of
Public Safety, the Perfluoroalkyl and Polyfluoroalkyl Substances Cash Fund in CDPHE and CDOT
causes no net increase in expenditures, but shifts where these expenditures will occur. Generally
speaking, expenditures in CDPS will increase, expenditures in CDPHE will decrease, and
expenditures in CDOT may increase or decrease, depending on the total revenue collected.
Other state agencies’ fleet impacts. Similar to CDOT and DPA, any state agency that owns and
operates older diesel trucks may need to replace them beginning in FY 2023-24. Any increase in
expenditures will be addressed through the annual budget process.
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 8.
Other Budget Impacts
TABOR refunds. The bill is expected to decrease the amount of state revenue required to be refunded
to taxpayers by the tax credit amounts shown in Table 4 of the State Revenue section above. This
estimate assumes the March 2023 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.
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.
Local Government
Revenue and expenditures will increase in any local government that receives a grant from the Fuels
Impact Enterprise. The bill specifies annual awards as follows:
$6,400,000 to Adams County;
$2,000,000 to the city of Aurora;
$1,300,000 to El Paso County;
$240,000 to Mesa County; and
$60,000 to Otero County. Page 11
April 21, 2023 SB 23-280
Technical Note
The Department of Revenue may be unable to complete the required changes to the state’s tax
management systems based on the deadlines in the bill.
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 $576,346 from the General Fund to the
Department of Revenue, and 2.5 FTE.
The Fuels Impact Enterprise Cash Fund is continuously appropriated to the Fuels Impact Enterprise
in the Department of Transportation, which requires 0.8 FTE.
The Clean Fleet Enterprise Diesel Truck Emissions Reduction Grant Program Cash Fund is
continuously appropriated to the Clean Fleet Enterprise in the Department of Public Health and
Environment, which requires 1.6 FTE.
State and Local Government Contacts
Colorado Energy Office Information Technology Labor
Law Personnel Public Health and Environment
Public Safety Revenue 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.