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July 18, 2023 SB 23-280
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0270
Sen. Mullica
Rep. Snyder
Date:
Bill Status:
Fiscal Analysts:
July 18, 2023
Signed into Law
Matt Bishop | 303-866-4796
Emily Dohrman | 303-866-3687
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 and a grant program, 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 and includes an appropriation of $36,272 to the
Department of Revenue. The Fuels Impact Enterprise Cash Fund is continuously
appropriated to the Department of Transportation.
Fiscal Note
Status:
This fiscal note reflects the enacted bill.
Table 1
State Fiscal Impacts Under SB 23-280
Budget Year
FY 2023-24
Out Year
FY 2024-25
Revenue Cash Funds $14.5 million $19.5 million
Total Revenue $14.5 million $19.5 million
Expenditures General Fund $36,272 -
Cash Funds $14,389,621 $14,899,596
Centrally Appropriated $16,486 $20,223
Total Expenditures $14,442,379 $14,919,819
Total FTE 0.8 FTE 1.0 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 General Fund Reserve $5,441 - Page 2
July 18, 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, and a grant program. 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.
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 2.
Table 2
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
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July 18, 2023 SB 23-280
Under 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.
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 increases state revenue from the new fee on fuel distributors by about $14.5 million in
FY 2023-24 and $19.5 million in FY 2024-25.
The Fuels Impact Enterprise will impose a fee of up to 0.6125 cents per gallon on manufacturers or
distributors of certain fuel products. 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.
Table 3
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
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.
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July 18, 2023 SB 23-280
State Expenditures
The bill increases state expenditures in CDOT by $14.4 million in FY 2023-24 and $14.9 million in
FY 2024-25 paid from the Fuels Impact Enterprise Cash Fund. The bill also increases expenditures in
the Department of Revenue by $36,272 in FY 2023-24 only from the General Fund. Expenditures are
shown in Table 4 and discussed below
Table 4
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 Revenue
Computer Programming $28,880 -
Office of Research and Analysis $7,392 -
DOR Subtotal $36,272 -
Total Cost $14,442,379 $14,919,819
Total FTE 0.8 FTE 1.0 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.
Department of Revenue. This bill requires expenditures of $36,272 to program, test, and update
database fields in the DOR's GenTax software system. Programming costs are estimated at $18,000,
representing 80 hours of contract programming at a rate of $225 per hour. Costs for testing are
estimated at $10,880, representing 340 hours of user acceptance testing at a rate of $32 per hour. Page 5
July 18, 2023 SB 23-280
Expenditures in the Office of Research and Analysis are required for changes in the related GenTax
reports so that the department can access and document tax statistics related to the new tax policy;
this cost is estimated at $7,392, representing 231 hours at $32 per hour.
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.
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 4.
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.
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.
Effective Date
The bill was signed into law by the Governor on June 6, 2023, and takes effect on August 7, 2023,
assuming no referendum petition is filed.
State Appropriations
For FY 2023-24, the bill requires and includes an appropriation of $36,272 from the General Fund to
the Department of Revenue.
The Fuels Impact Enterprise Cash Fund is continuously appropriated to the Fuels Impact Enterprise
in the Department of Transportation, which requires 0.8 FTE. Page 6
July 18, 2023 SB 23-280
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.