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April 29, 2024 SB 24-095
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated February 28, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0791
Sen. Kirkmeyer
Date:
Bill Status:
Fiscal Analyst:
April 29, 2024
Senate Finance
Matt Bishop | 303-866-4796
matt.bishop@coleg.gov
Bill Topic: AIR QUALITY OZONE LEVELS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill addresses high ozone levels in the Front Range through a variety of
mechanisms, including creating a voucher program, modifying an existing grant
program, and requiring air quality studies. It increases state and local revenue and
expenditures starting in FY 2024-25.
Appropriation
Summary:
For FY 2024-25, the bill requires an appropriation of $0.8 million to multiple state
agencies.
Fiscal Note
Status:
The revised fiscal note reflects the introduced bill, as amended by the Senate
Transportation and Energy Committee.
Table 1
State Fiscal Impacts Under SB 24-095
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue Enterprise Cash Fund $8.3 million $10.0 million
Total Revenue $8.3 million $10.0 million
Expenditures General Fund $642,009 $820,043
Cash Funds $825,982 $1,294,208
Centrally Appropriated $105,019 $136,487
Total Expenditures $1,573,010 $2,250,738
Total FTE 5.3 FTE 7.0 FTE
Transfers - -
Other Budget Impacts TABOR Refund $120,589 $63,190
General Fund Reserve $96,301 $123,006
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April 29, 2024 SB 24-095
Summary of Legislation
The bill addresses high ozone levels in the Front Range through a variety of mechanisms, as
described below.
High-Emitter Vehicle Program—vouchers. The bill creates the High-Emitter Vehicle Program,
operated by the Nonattainment Area Air Pollution Mitigation Enterprise, to provide incentives
for the owner of a passenger car or light-duty truck to voluntarily repair their vehicle in order to
reduce emissions of ozone precursors. Under current law, vehicles that fail an emissions test
must be repaired, and if they subsequently fail another emissions test they may receive a
certificate of emissions waiver. The program identifies vehicles that have received a waiver or
which have been identified has having high emissions from the Clean Screen Program and
provides a voucher to offset the cost of additional repairs to the vehicle’s owner if they reside in
an ozone nonattainment area. The rebates are funded from revenue generated by vehicle
registration fees. The program repeals if Colorado achieves attainment of federal ozone
standards.
Electric lawn equipment rebate program. The bill provides $100,000 to the Regional Air
Quality Commission to be used for a rebate program for the replacement of gas-powered lawn
equipment with electric lawn equipment.
Clean Fleet Enterprise expansion. Under current law, the Clean Fleet Enterprise operates a
grant program that includes promoting the adoption of electric vehicles in fleets. The program
considers fleets primarily composed of heavy-duty vehicles, medium-duty vehicles, and
refrigerated trailers. The bill adds light-duty vehicles to this list. It also directs the enterprise to
prioritize awarding fleet electrification grants to local governments.
Ozone studies. The bill requires CDPHE to conduct photochemical modeling studies to evaluate
ambient ozone levels and the effectiveness of policies targeting ozone reduction. CDPHE must
conduct the studies at least annually beginning in 2025, and it must the results in its annual
SMART Act hearing beginning in 2026. The study requirement repeals if Colorado achieves
attainment of federal ozone standards.
Motor vehicle emissions inspections. Under current law, a emissions testing facility can charge
a fee of no more than $25. The bill raises the fee maximum to $35, which is adjusted annually for
inflation, and directs CDPHE to renegotiate or renew existing contracts in FY 2024-25 to
incorporate the new fee maximum, increase testing stations, and expand Clean Screen
inspection units.
Background
DRIVES upgrade. The Division of Motor Vehicles (DMV) in the Department of Revenue (DOR)
uses its Driver License, Record, Identification and Vehicle Enterprise Solution (DRIVES)
information technology system for all driver license and motor vehicle transactions. The DRIVES
system requires an extensive 18-month upgrade which is scheduled to take place from
July 1, 2024, through March 31, 2026. As a result, the DOR has requested that any new Page 3
April 29, 2024 SB 24-095
legislation requiring DRIVES programming have an effective date of April 1, 2026, with
roll-forward spending authority through FY 2026-27, noting that each programming
requirement during the system upgrade period may increase the overall project timeline. Based
on the current effective date in the bill, the fiscal note includes costs for the DRIVES
programming to take place twice—in the existing and new system.
State Revenue
The bill increases state revenue collected by the Clean Screen Authority, a state enterprise, by up
to $10 million per year.
Fee impact on front range vehicle owners. Colorado law requires legislative service agency
review of measures which create or increase any fee collected by a state agency. The bill
authorizes up to a $10 fee increase for emissions inspections that are required for Boulder,
Broomfield, Denver, Douglas, and Jefferson counties, and in portions of Adams, Arapahoe,
Larimer and Weld counties. Actual fees will be set administratively by the Clean Screen
Authority. Table 2 assumes 1 million paid emissions inspections, based on 2022 annual
reporting. First-year costs are prorated for 10-months of fee impact.
Table 2
Fee Impact on Front Range Vehicle Owners
Fiscal Year Type of Fee Fee Increase
Number
Affected
Total Fee
Impact
FY 2024-25 Emissions Inspection Fee $10 833,333 $8,333,333
FY 2025-26 Emissions Inspection Fee $10 1,000,000 $10,000,000
State Expenditures
On net, the bill increases state expenditures by $2.2 million in FY 2024-25 and $2.3 million in
FY 2025-26 and ongoing, paid from the General Fund and from the Nonattainment Area Air
Pollution Mitigation Enterprise Cash Fund. Expenditures are shown in Table 3 and detailed
below.
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April 29, 2024 SB 24-095
Table 3
Expenditures Under SB 24-095
FY 2024-25 FY 2025-26
Department of Transportation
Personal Services $177,003 $221,254
Operating Expenses $3,072 $3,840
Capital Outlay Costs $20,010 -
Repair Vouchers $510,000 $1,020,000
Centrally Appropriated Costs
1
$47,503 $59,378
FTE – Personal Services 2.4 FTE 3.0 FTE
CDOT Subtotal $757,588 $1,304,472
Department of Public Health and Environment
Personal Services $243,671 $291,075
Operating Expenses $3,328 $3,968
Capital Outlay Costs $20,010 -
Ozone Studies $375,000 $525,000
Electric Lawn Equipment Program $100,000 -
Centrally Appropriated Costs
1
$52,824 $63,033
FTE – New Personal Services 2.6 FTE 3.1 FTE
CDPHE Subtotal $794,833 $883,076
Department of Revenue
Personal Services $12,862 $38,585
Operating Expenses $384 $1,152
Capital Outlay Costs - $6,670
Computer Programming $2,651 $2,707
Centrally Appropriated Costs
1
$4,692 $14,076
FTE – Personal Services 0.3 FTE 0.9 FTE
DOR Subtotal $20,589 $63,190
Total Costs $1,573,010 $2,250,738
Total FTE 5.3 FTE 7.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
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April 29, 2024 SB 24-095
Department of Transportation. Expenditures increase for CDOT to administer the High-Emitter
Vehicle Program, paid from the Nonattainment Area Pollution Mitigation Enterprise Cash Fund.
Staffing. The department requires 3.0 FTE to develop the program, including collaborating
with other departments, publicizing the program, hosting events, and processing voucher
payments. Standard operating and capital outlay costs are included, and costs are prorated
for the bill’s effective date.
Repair vouchers. The amount spent on vouchers depends on the number of eligible
vehicles that are repaired through the voucher program. Table 3 assumes 100 vouchers per
month beginning January 1, 2025. If the number of qualified vehicles differs from this
amount, expenditures will likewise differ. The enterprise currently uses those funds to
mitigate the environmental and health impacts of increased air pollution from motor vehicle
emissions. Those other enterprise expenditures may decrease by the amount spent on
vouchers instead.
Department of Public Health and Environment. Expenditures in CDPHE increase on net to
perform the ozone studies and support the electric law equipment program. Costs are paid from
the General Fund unless otherwise noted.
Staff. CDPHE requires 3.1 FTE beginning in FY 2025-26 to conduct the photochemical
modeling studies and report on these activities as required. Standard operating and capital
outlay expenses are included, and costs are prorated for the bill’s effective date.
Ozone studies. Costs to conduct the required photochemical studies are estimated at
$375,000 per year beginning in FY 2024-25. In addition, costs increase in FY 2025-26 for data
visualization analysis, estimated at $150,000.
Electric law equipment program. The bill specifies $100,000 for the program operated by
the Regional Air Quality Committee, which is paid from the Nonattainment Area Air Pollution
Mitigation Enterprise Fund by CDPHE.
Department of Revenue. Expenditures increase for DOR to register additional repair facilities
for the voucher program and to update the DRIVES system, paid from the Nonattainment Area
Air Pollution Mitigation Enterprise Cash Fund.
Staffing. As the voucher program incentivizes repair facilities to register with the
department, additional staff are required to process registration applications and conduct
audits for eligibility. The fiscal note assumes that 120 additional facilities will register, phased
in over two years, requiring 0.3 FTE in FY 2024-25 and 0.9 FTE in subsequent years in DOR.
Standard operating and capital outlay costs are included, and costs are prorated for the bill’s
effective date.
DRIVES programming. Computer programming costs in FY 2024-25 and FY 2025-26
include DRIVES programming, estimated at eight hours each year at a rate of $248 per hour
in FY 2024-25 and $255 per hour in FY 2025-26; ISD development and testing costs,
estimated at six hours at a rate of $35 per hour in each year; support from the Office of
Information Technology estimated at three hours at a rate of $99 per hour in each year, paid Page 6
April 29, 2024 SB 24-095
to OIT through real-time billing; and business user acceptance testing at five hours at a rate
of $32 per hour in each year.
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 3.
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 impact
occurs because paying for state agency expenditures with enterprise revenue makes that
revenue subject to TABOR once it is used for state government purposes outside of the
enterprise. This estimate assumes the March 2024 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 General Fund revenue will increase the TABOR refund
obligation, but result in no net change to 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
The bill may increase revenue to local governments to the extent that they apply for and are
awarded grants from the Clean Fleet Enterprise.
Technical Note
The fiscal note currently includes a duplicative programming cost for the DOR’s DRIVES system,
as discussed in the Background and Assumptions section. The duplicate cost would be removed
if the bill’s effective date were amended to April 1, 2026, when the DRIVES upgrade is complete.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed, and it applies to sales of new electric powered lawn equipment
occurring on or after that date.
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April 29, 2024 SB 24-095
State Appropriations
For FY 2024-25, the bill requires a General Fund appropriation of $642,009 from the General
Fund to the Department of Public Health and Environment, and 2.6 FTE.
No appropriation is required to the Department of Transportation, as the Nonattainment Area
Air Pollution Mitigation Enterprise Cash Fund is continuously appropriated to Nonattainment
Area Air Pollution Mitigation Enterprise. However, for FY 2024-25, the bill requires the following
appropriations from the Nonattainment Area Air Pollution Mitigation Enterprise Cash Fund to
the following state agencies:
$100,000 to the Department of Public Health and Environment; and
$15,897 to the Department of Revenue, and 0.3 FTE.
State and Local Government Contacts
Counties Law Public Health and Environment
Revenue Transportation Treasury
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.