Governor’s initiatives take center stage as major policies wait in the wings

Governor Polis has made no secret of his desire to increase housing density in Colorado to limit sprawl, reduce water consumption, and reduce vehicle commutes which add to the ozone problem.

Nonetheless, his solution, SB 213 addressing Land Use, is breath-taking in its scope, dividing municipalities into categories based on population and requiring them to adopt model codes developed by the Dept. of Local Affairs, or adopt minimum standards that reflect the codes. Depending on the municipal category, certain types of housing including accessory dwelling units (ADUs), middle housing (e.g. townhouses), or multi-family units must be allowed as a use by right. The bill does not apply to counties except those that are in a region classified as a rural-resort jobs center and must engage in regional planning. This approach is accompanied by HB 1255, which prohibits growth caps and occupancy restrictions, essentially limiting local governments of control over residential zoning. These measures have providers of water, sewer, and other services scratching their heads as to how they can match growth to the available services, as the bill contains no exemptions for insufficient infrastructure—only the ability to extend the deadline for code adoption. Introduced on March 22 and 24, respectively, the bills are fast-tracked and scheduled for hearing April 5 and 6.

Following up on a press conference held by the Governor and statehouse Democrats in March touting their clean energy incentives, HB 1272 was made available late on March 31 and scheduled for hearing April 6. The 97-page bill offers a variety of income tax credits which reduce the TABOR refund obligation, and are funded by reduction of the oil and gas ad valorem severance tax credit. The tax credits are available for purchase or lease of electric cars, certain trucks and fleet vehicles, geothermal equipment, heat pumps, and geothermal energy production, and incentives to industrial facilities for reducing GHG emissions. Another just-introduced bill offers income tax credits and smooths the pathway at the PUC for investor-owned utilities that establish an approved clean hydrogen project.

The March Rock ‘n’ Coal discussed a report prepared by the Oil and Gas Conservation Commission at the Governor’s request which outlined recommendations for moving forward with various carbon management goals. A draft bill now circulating changing the name of the oil and gas conservation commission to the energy and carbon management commission (commission) and expands the commission’s regulatory authority to include the authority to regulate certain energy and carbon management areas other than oil and gas. The bill anticipates the commission seeking primacy from EPA over Class VI UIC injection wells and taking over establishment of a framework for capturing and implementing geologic sequestration of CO2. This effort attempts to ride a wave of interest (as reported in the Wall Street Journal) expressed by some major oil and gas companies in developing geothermal energy and carbon capture, use, and storage (CCUS).

While newly proposed measures draw major attention, bills that were announced earlier in the session on ozone reduction, NPDES discharge permit fees, property tax, and labor practices for energy projects continue to await their turn in the spotlight. Concurrently, the legislature is completing the annual budget bill (Long Bill) and will soon tackle school finance, while continuing to vote on a host of employment-related legislation. All that said, by the time you read this only thirty days or so will remain for the legislature to complete its work before adjournment sine die on May 8.

Hold onto your hats, it will be a bumpy ride!