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February 19, 2024 SB 24-123
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0517
Sen. Priola; Hansen
Rep. Mauro; Froelich
Date:
Bill Status:
Fiscal Analyst:
February 19, 2024
Senate Finance
Matt Bishop | 303-866-4796
matt.bishop@coleg.gov
Bill Topic: WASTE TIRE MANAGEMENT ENTERPRISE
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill creates the Waste Tire Management Enterprise. It increases state revenue and
expenditures on an ongoing basis beginning in FY 2024-25, and may impact local
revenue and expenditures.
Appropriation
Summary:
The bill requires a reduction in appropriations to the CDPHE. Enterprise spending will
increase from the continuously appropriated Waste Tire Management Enterprise Fund
and the End Users Fund. See State Appropriations section.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under SB 24-123
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue Cash Funds up to $10.6 million up to $21.9 million
Total Revenue up to $10.6 million up to $21.9 million
Expenditures Cash Funds up to $10.6 million up to $21.9 million
Centrally Appropriated $24,891 $24,891
Total Expenditures up to $10.6 million up to $21.9 million
Total FTE 1.4 FTE 1.3 FTE
Transfers - -
Other Budget Impacts - -
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February 19, 2024 SB 24-123
Summary of Legislation
Under current law, the Department of Public Health and Environment (CDPHE) collects a fee
from the sale of each new tire to pay for cleaning up waste tires, providing grants to local
entities, offering rebates to end users of waste tires, and other related activities.
The bill creates the Waste Tire Management Enterprise in CDPHE and moves many of the
department’s functions related to waste tires to the enterprise. CDPHE must provide office space
and administrative support to the enterprise upon request. The bill also extends the waste tire
fee, which is scheduled to repeal on December 31, 2025, through December 31, 2040. The
enterprise is permitted to raise the waste tire fee from $0.55 per tire to an amount determined
by the enterprise of up to $4.00 per tire. As an enterprise, this fee revenue is not subject to the
state’s revenue limit (TABOR).
The bill makes a number of conforming changes, including:
renaming the Waste Tire Administration, Enforcement, Market Development, and Cleanup
Fund as the Waste Tire Management Enterprise Fund, and making both it and the End Users
Fund continuously appropriated to the enterprise;
appointing a board of directors to oversee the enterprise, who are permitted per diem
expenses and reimbursement for costs incurred in their duties;
granting the enterprise the authority to issue revenue bonds; and
clarifying which waste tire functions are the responsibility of the enterprise and which should
be requested from CDPHE.
State Revenue
On net, the bill increases state cash fund revenue by up to $10.6 million in FY 2024-25 and
$23.7 million in FY 2025-26, which is credited to the Waste Tire Management Enterprise Fund
and to the End Users Fund. Any revenue generated by the enterprise, including revenue from
the existing waste tire fee, is not subject to TABOR. This estimate is based on a fee of $4.00 per
tire. The amount of new revenue will be less if the enterprise sets a fee less than the maximum.
Fee impact on tire purchases. 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 Waste Tire Enterprise based on
cash fund balance, program costs, and the number of tires expected to be sold. Table 2 below
identifies the maximum potential fee impact of this bill if the fee is raised from $0.55 to $4.00 (a
$3.45 increase) effective January 1, 2025. The analysis also assumes the number of tires sold will
increase by 3 percent each year.
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February 19, 2024 SB 24-123
Table 2
Fee Impact on Tire Purchases
Fiscal Year Type of Fee
Proposed
Fee Increase
1
Number
Affected
Total Fee
Impact
FY 2024-25 Waste Tire Fee (half-year) up to $3.45 3.1 million up to $10.6 million
FY 2025-26 Waste Tire Fee up to $3.45 6.4 million up to $21.9 million
1
The actual fee amount will be set by the enterprise.
Voter approval of new state enterprises. Current law requires voter approval for a state
enterprise with projected or actual revenue from fees and surcharges over $100 million in its
first five fiscal years. The new enterprise in this bill will begin operating in FY 2024-25. Through
FY 2029-30, the enterprise is projected to collect less than $100 million in fees. Should fee
revenue to the new enterprise approach the $100 million threshold, it is assumed that the
enterprise board will adjust waste tire fees so as not to exceed this amount.
State Transfers
Under current law the balance of the Waste Tire Administration, Enforcement, Market
Development, and Cleanup Fund and the End Users Fund transfer to the General Fund in 2026.
By extending the programs, the bill eliminates these transfers, and instead transfers any
remaining balance of the End Users Fund to the General Fund in 2041.
State Expenditures
On net, the bill increases state expenditures in CDPHE by up to $10.6 million in FY 2024-25 and
up to $21.9 million in FY 2025-26, paid from the Waste Tire Management Enterprise Fund and
the End Users Fund. These are net impact after shifting the existing waste tire program to the
enterprise, accounting for additional administrative costs to set up and run the enterprise, and
potentially expanded operations if waste tire fees are increased above current levels. Page 4
February 19, 2024 SB 24-123
Table 3
Expenditures Under SB 24-123
FY 2024-25 FY 2025-26
Department of Public Health and Environment
Shift of Current Program from CDPHE ($4,375,256) ($8,750,511)
Shift of Current Program to Enterprise $4,375,256 $8,750,511
Expanded Enterprise Operations up to $10,400,000 up to $21,700,000
Personal Services $117,921 $117,921
Operating Expenses $1,536 $1,536
Capital Outlay Costs $6,670 -
Legal Services $51,208 $25,604
Board Expenses $9,000 $9,000
Centrally Appropriated Costs
1
$24,891 $24,891
FTE – Personal Services 1.2 FTE 1.2 FTE
FTE – Legal Services 0.2 FTE 0.1 FTE
Total Cost up to $10,611,226 up to $21,878,952
Total FTE 1.4 FTE 1.3 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Public Health and Environment. Under the bill, current expenditures on the
waste tire program will shift from the Hazardous Materials and Waste Management Division to
the newly created enterprise. In addition, the new enterprise will require additional staff for the
expanded duties of the enterprise.
Shift of existing program funding. CDPHE’s current waste tire program will instead be
administered by the enterprise. Current funding for the program is about $8.8 million and
8.0 FTE on a full year basis. The existing program will shift to the new enterprise on
January 1, 2025.
Staff. The fiscal note assumes that the enterprise will require an additional 1.2 FTE starting
in FY 2024-25. Standard operating and capital outlay costs are included.
Legal services. The enterprise will require about 400 hours of legal services to update rules
and fees in FY 2024-25, and about 200 hours in FY 2025-26. Legal services are provided by
the Department of Law at a rate of $128.02 per hour.
Board expenses. The enterprise’s board members are eligible for reimbursement for costs
incurred to attend board meetings, and most are also eligible for a per diem.
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February 19, 2024 SB 24-123
Expanded enterprise operations. The enterprise has the authority to raise revenue by
issuing bonds or raising the waste tire fee above the current fee level (as described in the
State Revenue section above). If it chooses to do so, expenditures will likewise increase to
perform additional waste tire management activities, including expanding the rebate
program for end users of waste tires and awarding grants to local entities.
Other state agencies. The bill may increase expenditures in any state agency that purchases
tires. This is expected to increase expenditures in the Department of Personnel and
Administration by up to $14,000 and in the Department of Transportation by up to $2,000 in
FY 2024-25. This can be accomplished within existing appropriations. Future increases, which
depend on the fee set by the enterprise, will be addressed through the annual budget process.
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 fiscal note assumes that there will be a downward adjustment to the
Referendum C cap of about $3.4 million to reflect the shift in current state revenue subject to
TABOR becoming part of an enterprise. Thus, the bill will not have an impact on TABOR refunds,
as it reduces state revenue subject to TABOR and the amount of the cap by equal amounts.
Ongoing and additional revenue to the enterprise is not subject to TABOR and will not affect
future TABOR refunds.
Local Government
If the enterprise increases the waste tire fee, more grant funding may be available to local
governments for activities related to waste tire management and cleanup. Revenue and
expenditures will increase in any local government that applies for and is awarded additional
grant funds. In addition, expenditures will minimally increase for local governments that
purchase tires.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
State Appropriations
For FY 2024-25, the bill requires the following adjustments to CDPHE appropriations to account
for the start of the Enterprise on January 1, 2025: Page 6
February 19, 2024 SB 24-123
a reduction of $1,112,756 from the Waste Tire, Administration, Enforcement, Market
Development, and Cleanup Fund; and
a reduction of $3,262,500 from the End User Fund.
No additional appropriations to the enterprise are required, as the Waste Tire Management
Enterprise Fund and the End Users Fund are continuously appropriated to the Waste Tire
Management Enterprise. The Department of Law requires a reappropriation of $51,208 and
0.2 FTE for FY 2024-25 from the CDPHE for legal services provided to the enterprise.
State and Local Government Contacts
Law Personnel Public Health and Environment
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.