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April 18, 2024 SB 24-123
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated February 19, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0517
Sen. Priola; Hansen
Rep. Mauro; Froelich
Date:
Bill Status:
Fiscal Analyst:
April 18, 2024
House 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 expenditures
beginning in FY 2024-25, increases state revenue beginning in FY 2025-26, and may
impact local revenue and expenditures.
Appropriation
Summary:
The bill requires an appropriation of $60,208 to the Department of Public Health and
Environment.
Fiscal Note
Status:
This revised fiscal note reflects the reengrossed 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 $22.1 million
Total Revenue - up to $22.1 million
Expenditures Cash Funds $60,208 up to $22.1 million
Centrally Appropriated - $24,891
Total Expenditures $60,208 up to $22.1 million
Total FTE 0.2 FTE 2.2 FTE
Transfers - -
Other Budget Impacts
1
TABOR Refund - ($1.7 million)
1
Under the bill, a state agency fee that is subject to TABOR is repealed and a new fee assessed by an enterprise is
created, resulting in a decrease in revenue subject to TABOR. Page 2
April 18, 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.
Effective July 1, 2025, 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
lease office space and provide administrative support to the enterprise upon request. The bill
also repeals the existing waste tire fee, which is $0.55 and scheduled to repeal on
December 31, 2025, and creates the following two new fees collected by the enterprise:
the waste tire enterprise fee, which is assessed on the sale of new tires in an amount
determined by the enterprise of up to $2.50 per tire; and
the waste tire administration fee, which must be at least $0.50 but not more than half the
waste tire enterprise fee.
The enterprise may change the fee amounts annually, and the maximum amount of the waste
tire enterprise fee is indexed to inflation. As an enterprise, this fee revenue is not subject to the
state’s revenue limit (TABOR). The bill continues the fee indefinitely.
The bill extends the use of monofill storage by 10 years, until 2034, and it also creates the Waste
Tire Management Grant Program to promote the development of waste tire recycling, beneficial
reuse, and management strategies. The enterprise may use up to 10 percent of the waste tire
enterprise fee revenue for the grant program each year.
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, creating the Waste Tire Administration
Fund, and making these funds 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 authority to issue revenue bonds;
allowing CDPHE to loan money to the enterprise to defray expenses until the new fees start;
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 $22.1 million in FY 2025-26, which is
credited to the Waste Tire Management Enterprise Fund, the Waste Tire Administration Fund,
and the End Users Fund. All revenue generated by the enterprise is not subject to TABOR. This
estimate is based on total fees of up to $3.75 per tire. The amount of new revenue will be less if
the enterprise sets fees below the maximum. Page 3
April 18, 2024 SB 24-123
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 net fee is raised from $0.55 to
$3.75 (a $3.20 increase) effective July 1, 2025. Because the existing fee is scheduled to repeal on
December 31, 2025, that portion represents a half-year impact. The analysis also assumes the
number of tires sold will increase by 3 percent each year.
Table 2
Fee Impact on Tire Purchases
Fiscal Year Type of Fee
Estimated
Fee Increase
1
Number
Affected Total Fee Impact
FY 25-26 Existing Waste Tire Fee (half-year) ($0.55) 3.2 million ($1.7 million)
Waste Tire Enterprise Fee up to $2.50 6.4 million up to $15.9 million
Waste Tire Administration Fee up to $1.25 6.4 million up to $7.9 million
FY 2025-26 Total up to $22.1 million
1
Fee amounts shown are the maximum; actual fee amounts will be set by the enterprise and may vary from this
estimate.
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.
State Expenditures
On net, the bill increases state expenditures in CDPHE by about $60,000 in FY 2024-25 and up to
$22.1 million in FY 2025-26, paid from the Waste Tire Management Enterprise Fund, the Waste
Tire Administration Fund, and the End Users Fund. These are net impacts after shifting the
existing waste tire program to the enterprise, accounting for additional administrative costs to
set up and run the enterprise, and expanded operations if waste tire fees are increased above
current levels.
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April 18, 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 - ($8,750,511)
Shift of Current Program to Enterprise - $8,750,511
Expanded Enterprise Operations - up to $21,800,000
Personal Services - $172,637
Operating Expenses - $2,816
Capital Outlay Costs - $13,340
Legal Services $51,208 $25,604
Board Expenses $9,000 $9,000
Centrally Appropriated Costs
1
- $41,552
FTE – Personal Services - 2.2 FTE
FTE – Legal Services 0.2 FTE 0.1 FTE
Total Cost $60,208 up to $22,064,949
Total FTE 0.2 FTE 2.3 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Public Health and Environment. Under the bill, the enterprise will perform
rulemaking in FY 2024-25, using loaned funding from CDPHE. Current expenditures for the
waste tire program will shift from the Hazardous Materials and Waste Management Division of
CDPHE to the newly created enterprise in FY 2025-26. In addition, the new enterprise will require
additional staff for the expanded duties of the enterprise beginning in FY 2025-26.
Shift of existing program funding. CDPHE’s current waste tire program will instead be
administered by the enterprise beginning in FY 2025-26, when it is allowed to collect this fee
revenue. Current funding for the program is about $8.8 million and 8.0 FTE on a full year
basis.
Staff. The fiscal note assumes that the enterprise will require an additional 2.2 FTE starting in
FY 2025-26. 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. These costs
begin in FY 2024-25.
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April 18, 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 $31,000 and in the Department of Transportation by up to $5,000 in
FY 2025-26. As actual expenditures will depend on the fee set by the enterprise, this 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 bill specifies that the creation of the enterprise does not constitute the
qualification of an existing government-owned business. By moving waste tire fee collection to
the enterprise, the bill decreases state revenue subject to TABOR by the amounts shown in
Table 1, assuming the March 2024 LCS forecast. Because TABOR refunds are paid from the
General Fund, decreased cash fund revenue subject to TABOR will increase the amount of
General Fund available to spend or save. Ongoing and additional revenue from the new fees 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, except that the sections pertaining to the new fees and the enterprise’s operations
take effect July 1, 2025.
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April 18, 2024 SB 24-123
State Appropriations
For FY 2024-25, the bill requires an appropriation of $60,208 to the Department of Public Health
and Environment from the Waste Tire Administration, Enforcement, Market Development, and
Cleanup Fund, for use by the enterprise. Of this, $51,208 is reappropriated to the Department of
Law, with 0.2 FTE.
State and Local Government Contacts
Law Personnel and Administration 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.