Page 1
June 24, 2024 HB 24-1336
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0562
Rep. Parenti; Weinberg
Sen. Rodriguez; Priola
Date:
Bill Status:
Fiscal Analyst:
June 24, 2024
Signed into Law
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, and transfers the
function of awarding High Cost Support Mechanism broadband funding to the
Colorado Broadband Office through September 1, 2030. 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 includes a decrease in appropriations of $280,102 to the Office
of Information Technology. The remainder of the costs under the bill will be paid from
a continuously appropriated cash fund. See State Appropriations section.
Fiscal Note
Status:
The final fiscal note reflects the enacted 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beginning in FY 2025-26 regardless of whether the bill passes, as the board is repealed with or without this bill.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
June 24, 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) through September 1, 2030. 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 continuously appropriated 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. Page 3
June 24, 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, which is continuously appropriated. 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 was signed into law by the Governor on May 22, 2024, and takes effect on
August 7, 2024, assuming no referendum petition is filed.
State Appropriations
For FY 2024-25, the bill includes an appropriation reduction of $280,102 from various sources of
cash funds in OIT, and a reduction of 2.0 FTE. The Broadband Office Administrative Fund is
continuously appropriated to the OIT.
State and Local Government Contacts
Information Technology
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.