HB 25-1044
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1044: LOCAL FUNDING FOR VULNERABLE ROAD USERS
Prime Sponsors:
Rep. Boesenecker
Sen. Winter F.; Cutter
Published for: House Trans., Hous. & Local Gov.
Drafting number: LLS 25-0233
Fiscal Analyst:
Colin Gaiser, 303-866-2677
colin.gaiser@coleg.gov
Version: Initial Fiscal Note
Date: January 15, 2025
Fiscal note status: The fiscal note reflects the introduced bill, which was recommended by the
Transportation Legislation Review Committee.
Summary Information
Overview. The bill authorizes local governments to impose vehicle registration fees to fund vulnerable
road user protection strategies.
Types of impacts. The bill is projected to affect the following areas through FY 2025-26 and conditionally
thereafter:
State Expenditures Local Government
Appropriations. The bill requires appropriations to the Department of Revenue of $129,465 in the current
FY 2024-25 and $935,245 in FY 2025-26.
Table 1
State Fiscal Impacts
1
Type of Impact
Current Year
FY 2024-25
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue $0 $0 $0
State Expenditures (Cash Funds) $129,465 at least $935,245 Conditional
Transferred Funds $0 $0 $0
Change in TABOR Refunds $0 $0 $0
Change in State FTE 0.0 FTE Conditional Conditional
1
Conditional impacts will depend on local governments implementing the new fees permitted by the
bill and have not been estimated. See State Expenditures section for more detail. Page 2
January 15, 2025 HB 25-1044
Summary of Legislation
For motor vehicle registration periods beginning on or after January 1, 2026, the bill allows local
governments to impose fees on the registration of light trucks and passenger cars to fund
vulnerable road user protection strategies. Fees must defray only the costs of funding vulnerable
road user protection strategies, must impose higher fees on heavier motor vehicles, and may
impose higher fees on less fuel-efficient vehicles.
The bill establishes maximum fee amounts, based on vehicle weights, for the first year of fees
beginning January 1, 2026. In subsequent years, fees may not exceed the prior year’s inflation-
adjusted amounts. Local governments must deposit net fee revenue into a dedicated cash fund
or account, and must annually report fee schedules to the Department of Revenue (DOR) so the
DOR can collect fees on behalf of local governments.
Background
The Division of Motor Vehicles (DMV) in the 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 until March 31, 2026. As a result, the DOR has requested that
any new legislation requiring DRIVES programming have an effective date of July 1, 2027, with
roll-forward spending authority through FY 2028-29, 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 Expenditures
The bill increases state expenditures for the Department of Revenue by about $129,000 in
FY 2024-25 and $929,225 in FY 2025-26 for the DOR to make changes to its DRIVES computer
system to collect fees from local governments. It may also increase expenditures by an
indeterminate amount in FY 2025-26 and beyond for additional staffing to manage the
collection of any new fees imposed by local governments. Expenditures are shown in Table 2
and detailed below.
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January 15, 2025 HB 25-1044
Table 2
State Expenditures
Department of Revenue
Cost Component
Current Year
FY 2024-25
Budget Year
FY 2025-26
Out Year
FY 2026-27
Programming Costs $129,465 at least $135,245 Conditional
DRIVES Upgrade Extension $0 $800,000 $0
Staffing Costs
1
$0 Conditional Conditional
Centrally Appropriated $0 Conditional Conditional
Total Expenditures $129,465 at least $935,245 Conditional
Total FTE 0.0 FTE Conditional Conditional
1
Staffing costs in the DOR will depend on the number of local governments that elect to impose new
fees, with about 0.3 FTE required for every 10 local governments that create new fees.
DRIVES Programming
The bill requires $129,465 for DRIVES programming in FY 2024-25 to set up the new fees for
collection in time to meet the timeline laid out in the bill. Programming costs include $86,700
for 340 hours of programming at a rate of $238 per hour, plus $42,765 for ISD development,
Office of Information Technology support, and additional testing. The second round of
programming in FY 2025-26 requires $135,245, accounting for an increase in DRIVES
programming costs to $255 per hour.
Local governments that adopt new fees will also require individual DRIVES programming. The
amount of DRIVES programming necessary will vary considerably depending on local
government type, how many local governments adopt new fees, the geographic boundaries of
each local government, and the timing of when each local government chooses to impose new
fees. Therefore, the fiscal note is unable to estimate these DRIVES programming costs, which are
reflected as conditional impacts in Table 2.
DRIVES Upgrade Extension
The required DRIVES programming under the bill is expected to delay completion of the DRIVES
upgrade by approximately 4 months. Any change to the project timeline will require the vendor
to retain additional personnel beyond the current agreement, with the DOR responsible for
these additional costs. For each month the upgrade is delayed, the vendor will charge the DOR
an additional $200,000, resulting in an estimated cost of $800,000
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January 15, 2025 HB 25-1044
Staff
Beginning January 1, 2026, the DOR may require additional staff to address an increase in
workload. It is estimated that 0.3 FTE Business Analyst at a cost of about $25,000 will be required
for every 10 local governments that impose the new fee. This staff would develop rules and
procedures and accept applications and annual fee schedules from local governments. The fiscal
note is unable to estimate how much staff may be necessary and this has been reflected with
conditional impacts in Table 2. It is assumed that staffing costs will be requested through the
annual budget process based on the number of local governments implementing the new fees.
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 may include
employee insurance, supplemental employee retirement payments, indirect cost assessments,
and other costs, are shown in Table 2.
Local Government
For local governments that choose to impose new registration fees, the bill increases costs for
these local governments to create, staff, and administer new enterprises or grant programs.
Revenue will increase for these local governments on an ongoing basis once they begin
collecting registration fees as early as January 1, 2026. This revenue can only be used to fund
vulnerable road user protection strategies.
Technical Note
The fiscal note currently includes a duplicative programming cost and upgrade extension for the
DOR’s DRIVES system, as discussed in the Background section. These costs would be removed if
the bill’s effective date were amended to July 1, 2027, when the DRIVES upgrade is complete.
The fiscal note assumes that increased costs for the bill will be paid from the DRIVES Cash Fund,
and that the DOR will raise fees as necessary to ensure that it has sufficient funds to pay for
program expenses. However, the DOR reports that recent cash fund consolidations have placed
the fund above the allowable statutory reserve and it is unable to raise fees currently. At the
same time, current spending from the fund is projected to deplete the available fund balance
within the next two years. If the DOR is unable or unwilling to raise fees, the General Fund may
be required, either in this bill or through the annual budget process, to ensure cash fund
solvency. Page 5
January 15, 2025 HB 25-1044
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
State Appropriations
The bill requires the following appropriations to the Department of Revenue from the DRIVES
Cash Fund:
$129,465 for the current FY 2024-25; and
$935,245 for FY 2025-26.
State and Local Government Contacts
Counties
Local Affairs
Municipalities
Revenue
Special District Association
Transportation
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.