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February 21, 2024 HB 24-1279
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0930
Rep. DeGraaf
Date:
Bill Status:
Fiscal Analyst:
February 21, 2024
House State Affairs
Kristine McLaughlin | 303-866-4776
kristine.mclaughlin@coleg.gov
Bill Topic: VOTE TRACKING NUMBER ELECTIONS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill requires the use of distributed ledger technology in elections and establishes
voter eligibility verification systems for in person and mail in voting. The bill increases
state revenue and expenditures and local government expenditures on an ongoing
basis.
Appropriation
Summary:
For the current FY 2023-24, the bill requires an appropriation of $2.1 million. For
FY 2024-25, the bill requires an appropriation of about $6.3 million to the Department
of State.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 24-1279
Current Year
FY 2023-24
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Revenue Cash Funds - $6,258,682 $9,684,532 $6,806,887
Total Revenue - $6,258,682 $9,684,532 $6,806,887
Expenditures General Fund $2,105,600 - - $20,000,000
Cash Funds - $6,258,682 $9,684,532 $6,806,887
Total Expenditures $2,105,600 $6,258,682 $9,684,532 $26,806,887
Transfers - - - -
Other Budget TABOR Refund - $6,258,682 $9,684,532 not estimated
GF Reserve $315,840 - - $3,000,000
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February 21, 2024 HB 24-1279
Summary of Legislation
The bill establishes a system for the use of distributed ledgers in elections. A distributed ledger
allows information to be entered into a publicly available common database from multiple
locations at different times. The bill creates a system of vetting registrars and observer teams to
verify the eligibility of both in-person and mail in voters, and a process to assign a unique
identifier and other data about the cast vote record that can be maintained in the distributed
ledger. Votes counted must be entered into the distributed ledger system, unless the vote was
part of a manual count.
State Revenue
The bill increases fee revenue in the Department of State (DOS) by $6.3 million in FY 2024-25
and by at least that amount in future years until the new system is implemented, assuming DOS
adjusts its fees to cover the estimated costs paid from the Department of State Cash Fund. As
shown in Table 1, costs fluctuate year to year based on the number and types of elections held
in any given year.
Fee impact on businesses and professions. Colorado law requires legislative service agency
review of measures which create or increase any fee collected by a state agency. Under current
law, DOS authorized to adjust fees so that the revenue generated approximates its direct and
indirect costs. The DOS is primarily funded through business filing fees. To cover the costs
described in the State Expenditures section below, fees will likely need to be raised to cover all
or some of the costs of this bill. The fees affected and the actual amount of fee charges will be
set administratively by the DOS based on cash fund balance, total program costs, and the
estimated number of business activities subject to fees. This revenue is subject to TABOR.
State Expenditures
The bill increases state expenditures in DOS by $2.1 million in the current FY 2023-24,
$6.3 million in FY 2025-26, $9.7 million in FY 2025-26, and $26.8 million in FY 2026-27, paid from
the Department of State Cash Fund, except for the current year expenditures and the $20 million
in system redesign costs in FY 2026-27, which will be paid from the General Fund. Costs will
increase in the DOS to redesign the state’s voting system. The earliest election at which this
system could potentially be available is the 2028 general election. Until then, all vote tabulation
must be done using a hand count, which will drive additional costs to DOS. Expenditures are
shown in Table 2 and detailed below.
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February 21, 2024 HB 24-1279
Table 2
Expenditures Under HB 24-1279
Current Year
FY 2023-24
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Department of State
Increase Reimbursement Costs - $4,053,082 $5,373,332 $4,701,287
Statewide Hand Count Observation $2,105,600 $2,105,600 $4,211,200 $2,105,600
System Redesign Costs - $100,000 $100,000 $20,000,000
Total $2,105,600 $6,258,682 $9,684,532 $26,806,887
1
Centrally appropriated costs are not included in the bill's appropriation.
Statewide hand count. DOS will reimburse counties for a portion of the costs to conduct a
statewide hand count election. Additionally, DOS will observe all hand counts. These costs were
estimated based on the actual costs to conduct the 2022 Mesa County election using a hand
count. DOS may be required to request additional resources above this amount through the
annual budget process if costs for a statewide recount are higher than estimated.
County cost reimbursement. Under current law, DOS will reimburse counties for 45 percent
their election costs. Conducting elections by hand is estimated to increase these costs by at
least 50 percent.
Observation. DOS contracts with election observers for hand count elections. Based on the
rate paid to these observers, a statewide hand count is estimated to cost $2.1 million per
election. In odd years, two elections (primary and coordinated elections) are conducted. It is
assumed that for the current year, General Fund will be required. In future years, fees can be
raised to fund it through the Department of State Cash Fund.
System redesign costs. DOS will have costs to redesign the voting system in line with the bill
and existing law. These costs and timelines were informed by the early work done by Tusk
Philanthropies, a non-profit investing in mobile voting secured through blockchain technology
and are discussed below.
Study and planning. As of this writing, blockchain voting systems have been used in pilot
programs concerning oversees voting. The Uniformed and Overseas Citizens Absentee
Voting Act established special procedures for overseas voting. It is assumed that the DOS
will have costs in the first two years to study and plan for implementation for the general
population. A contractor with skills in this area is estimated to cost at least $100,000 per year
for two years.
System development and implementation. Pilot programs thus far, including the one
conducted in the May 2019 Denver Municipal election have largely been funded by Tusk
Philanthropies. In 2021, Tusk made an initial investment of $10 million in developing a
system that broader use than in the pilot programs. This is roughly the amount raised by Page 4
February 21, 2024 HB 24-1279
Voatz the application software used in the Denver election and elections in two other states.
Given that blockchain technology raises security and scalability concerns and that the system
will have to meet additional requirements, it is estimated that developing and implementing
a system for statewide voting will cost at least $20 million.
1
Given the magnitude of this cost relative to current DOS fee revenue, it is assumed that
system development costs will be paid from the General Fund. This estimate and timeline
will likely change once the study and planning concludes and more information is available.
DOS will request funding as needed through the annual budget process.
Other Budget Impacts
TABOR refunds. The bill is expected to increase 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 2023 LCS revenue forecast. A forecast of state revenue subject to TABOR
is not available beyond FY 2025-26. Because TABOR refunds are paid from the General Fund,
increased cash fund revenue will reduce the amount of General Fund 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
Statewide hand count. As discussed in the State Expenditure section, counting all elections by
hand until the new system is implemented is estimated to increase costs by 50 percent, resulting
in an increase in local costs of between $6 million and $10 million annually. Of these new local
costs, 45 percent will be reimbursed by DOS. Counties will be responsible for the additional
55 percent.
System redesign. Once the new system is developed by DOS, counties will have costs to update
the voting equipment, train staff, and hire new staff as needed.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
1
Freed, B. (2021, October 4). Mobile voting booster Bradley Tusk to spend another $10 million to build new system. StateScoop.
https://statescoop.com/mobile-voting-bradley-tusk-10-million Page 5
February 21, 2024 HB 24-1279
State Appropriations
For the current FY 2023-24, the bill requires an appropriation of $2,105,600 to the Department
of State from the General Fund.
For FY 2024-25, the bill requires an appropriation of $6,258,682 to the Department of State from
the Department of State Cash Fund.
State and Local Government Contacts
Counties County Clerks Secretary of State
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 the General Assembly website.