SB 25-040
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
SB 25-040: FUTURE OF SEVERANCE TAXES & WATER FUNDING TASK FORCE
Prime Sponsors:
Sen. Roberts; Simpson
Rep. McCormick; Martinez
Published for: Senate Ag. & Natural Resources
Drafting number: LLS 25-0165
Fiscal Analyst:
John Armstrong, 303-866-6289
john.armstrong@coleg.gov
Version: Initial Fiscal Note
Date: January 13, 2025
Fiscal note status: The fiscal note reflects the introduced bill, which was requested by the Water
Resources and Agricultural Review Committee.
Summary Information
Overview. The bill creates a task force to explore the impact of severance taxes on water resources.
Types of impacts. The bill is projected to affect the following areas through FY 2026-27:
State Expenditures
Appropriations. For FY 2025-26, the bill requires an appropriation of $198,592 to the Department of
Natural Resources.
Table 1
State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue $0 $0
State Expenditures (General Fund) $198,592 $29,718
Transferred Funds $0 $0
Change in TABOR Refunds $0 $0
Change in State FTE 0.0 FTE 0.0 FTE Page 2
January 13, 2025 SB 25-040
Summary of Legislation
The bill creates the Future of Severance Taxes and Water Funding Task Force in the Department
of Natural Resources (DNR). The 9-member task force will hire a contractor to conduct a study
and develop recommendations. The contractor must explore options to continue funding water
needs for the state while severance tax revenue is expected to decrease.
Appointments to the task force must be made by September 1, 2025. Members of the task force
may conduct meetings as necessary to oversee and revise the contractor’s work. The contractor
must submit a draft report to the task force by January 15, 2026, and a final report from the task
force is due to the Water Resources and Agriculture Review committee by July 15, 2026.
State Expenditures
The bill increases state expenditures in the DNR by $199,000 in FY 2025-26 and $30,000 in
FY 2026-27. These costs, paid from the General Fund, are summarized in Table 2 and discussed
below. The bill also minimally affects workload in the Department of Revenue and the
Governor’s Office.
Table 2
State Expenditures
Department of Natural Resources
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Third Party Contract $175,000 $25,000
Meeting Expenses and Support $23,592 $4,718
Total Costs $198,592 $29,718
Total FTE 0.0 FTE 0.0 FTE
Department of Natural Resources
Third-Party Contract
As required by the bill, the DNR will hire a contractor to provide policy, economic, and financial
analysis for the study. The total estimate for the contract is $200,000, which is based on similar
analysis completed in the DNR. Of this, $175,000 is expected to be expensed in the first year and
the remaining $25,000 will be spent in the second year.
Meeting Expenses and Support
Members of the task force serve without compensation, but can be reimbursed for any meeting
expenses. Overall, the task force is expected to meet a total of six times between
September 2025 and July 2026. Some members of the commission will require hotels, mileage Page 3
January 13, 2025 SB 25-040
reimbursement and per-diem expenses for any in person meetings, which is estimated to total
$8,636. Additionally, DNR will hire a temporary contract Program Assistant to prepare for each
of the six meetings, process reimbursements, transcribe meeting notes and conform with
accessibility standards. In total, DNR is expected to require 580 hours of temporary contract
program assistance at $33.92 per hour, resulting in $19,674 in administrative support expenses.
Approximately 75 percent of these expenses will occur in the budget year, with the remainder
occurring in the out-year.
Other Agency Impacts
Governor’s Office of Boards and Commissions
The Governor’s Office will spend approximately 20 hours to identify the appropriate
representatives to serve on the task force. This additional workload can be accomplished within
existing resources.
Department of Revenue
The Division of Taxation in the Department of Revenue will support the task force with
information on severance taxes and gathering the required data requested from the third party.
This additional workload can be accomplished within existing resources.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State Appropriations
For FY 2025-26, the bill requires a General Fund appropriation of $198,592 to the Department of
Natural Resources.
State and Local Government Contacts
Agriculture
Counties
Governor's Office
Natural Resources
Revenue
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.