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March 8, 2024 HB 24-1336
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0562
Rep. Parenti
Sen. Rodriguez
Date:
Bill Status:
Fiscal Analyst:
March 8, 2024
House Trans., Hous. & Local Govt.
Clayton Mayfield | 303-866-5851
clayton.mayfield@coleg.gov
Bill Topic: SUNSET BROADBAND DEPLOYMENT
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
Sunset bill. This bill repeals the Broadband Deployment Board in the Office of
Information Technology, and permanently transfers the function of awarding High
Cost Support Mechanism broadband funding to the Colorado Broadband Office in the
Office of Information Technology. State fiscal impacts include both increased revenue
and expenditures from changes to the program under the bill, as well as the
discontinuation of the board’s current expenditures.
Appropriation
Summary:
For FY 2024-25, the bill requires a net increase in appropriations of $245,291 to the
Office of Information Technology. See State Appropriations section.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 24-1336
1
New Impacts
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue Cash Funds $525,393 $533,042
Expenditures Cash Funds $525,393 $533,042
New FTE 3.5 FTE 4.0 FTE
Other Budget Impacts TABOR Refund
2
$525,393 $533,042
Continuing Impacts
Revenue Cash Funds - -
Expenditures Cash Funds ($280,102) ($280,102)
Continuing FTE (2.0 FTE) (2.0 FTE)
Other Budget Impacts TABOR Refund - -
1
Table 1 shows the new impacts resulting from changes to the functions of the Colorado Broadband Office under
the bill and the impact of repealing the Broadband Deployment Board. The continuing impacts will be the same
beginning in FY 2025-26 regardless of whether the bill passes, as the board is repealed with or without this bill.
2
This TABOR impact occurs because the bill allocates revenue from the TABOR-exempt High Cost Support
Mechanism to a cash fund subject to TABOR. Page 2
March 8, 2024 HB 24-1336
Summary of Legislation
The bill repeals the Broadband Deployment Board in the Office of Information Technology (OIT),
which is scheduled to repeal on September 1, 2024, and moves the task of awarding grants from
the High Cost Support Mechanism (HCSM) from the board to the Colorado Broadband Office
(CBO). This function is continued in the CBO indefinitely. Additionally, the bill modifies the types
of projects that are eligible for HCSM grant awards, including middle mile infrastructure projects
and projects in underserved areas, among other eligibility factors.
Finally, the bill creates the Broadband Office Administrative Fund, which receives up to five
percent of funding allocated for broadband deployment from the HCSM to cover the CBO’s
direct and indirect costs to administer the HCSM grant program.
Background
The HCSM is a TABOR-exempt fund held outside state government and administered by the
Public Utilities Commission in the Department of Regulatory Agencies (DORA). The fund receives
revenue from a provider surcharge on voice service. The HCSM was initially used to provide
financial assistance to telecommunications companies providing basic landline service in rural
areas of the state; however, as a result of multiple pieces of legislation passed since 2014, the
HCSM now also funds broadband deployment grants, which are currently administered by the
Broadband Deployment Board, which is supported by the OIT with 2.0 FTE paid from the
Broadband Administration Fund. In calendar year 2023, $13.7 million was allocated from the
HCSM for broadband deployment grants. The most recent HCSM report is available here. A
separate sunset bill, House Bill 24-1234, is currently pending that continues the HCSM.
Continuing Program Impacts
Based on recent appropriations, the Office of Information Technology is expected to have an
expenditure reduction of $280,102 per year related to its work administering the Broadband
Deployment Board, paid from the Broadband Administrative Fund, if this bill is enacted.
However, this staff will continue on with the CBO, with costs paid instead from the Broadband
Office Administrative Fund, as discussed below.
State Revenue
The bill allows up to five percent of HCSM allocations for broadband deployment grants, which
are TABOR-exempt, to be deposited into the Broadband Office Administrative Fund, which is
subject to TABOR, for administration of broadband deployment grants. The bill increases state
revenue by an estimated $525,393 in FY 2024-25, and by $533,042 in FY 2025-26 based on
estimated costs for the CBO to administer HCSM funding for broadband deployment as
discussed below. However, the CBO may use up to 5 percent of funding for its administration;
assuming the broadband share of the HCSM stays around $13.7 million, revenue and
expenditures could increase up to $684,000 per year.
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March 8, 2024 HB 24-1336
State Expenditures
The bill increases state expenditures in the OIT by an estimated $525,393 in FY 2024-25 and
$533,042 in FY 2025-26, paid from HCSM funding deposited into the Broadband Office
Administrative Fund. This cost is for 4.0 FTE to operate the HCSM grant program, evaluate and
issue grants for additional types of projects, and provide ongoing support and policy guidance
to broadband issues in the state.
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.
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 2024-25, the bill requires the following appropriations:
a reduction of $280,102 from the Broadband Administrative Fund in OIT, and a reduction of
2.0 FTE; and
an increase of $525,393 from the Broadband Office Administrative Fund in OIT, and 3.5 FTE.
State and Local Government Contacts
Governor's Office Information Technology Regulatory Agencies
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.