Draft legislative proposals are bringing the 2024 General Assembly into clearer focus and stimulating discussion among those potentially impacted. Much of CMA’s work since the 2023 session adjourned focused on interim committees, task forces, and stakeholder work established through previous legislation. The property tax special session and the Governor’s Budget submittal on November 1 provided additional insight on specific initiatives as well as general priorities.
Property Taxes
Despite media statements touting accomplishment on the topic of Property Tax, little was accomplished during the extraordinary (special) session that ran from November 17-20. One-year solutions were adopted to lower residential valuations by $55,000 and drop the assessment rate for residential property at 6.7% (SB 23B-01). A separate bill (HB 23B-1003) established Property Tax Commission composed of legislators, the property tax administrator, representatives of local governments, and other stakeholders. The 19-member task force is to be appointed by Dec. 4 and report to the legislature by March 15, 2024, concluding its work unless extended by the participants. The group is to recommend both short and long-term changes to property tax structures.
Dredge & Fill Permit Program
There will be a bill to create a Dredge and Fill permit program. What remains unknown, in addition to the scope of the program, is who will sponsor it, where it will be housed (DNR or CDPHE), and how it will be funded. The Governor convened a small group to discuss approaches to a program last summer. After initial meetings and a survey, little more has been released to the public or to the legislature. The Governor’s budget mentioned a “placeholder” of $600,000 for a program with little additional information. Subsequent budget staff briefings indicate that the Governor wishes to transfer money from the Severance Tax cash fund for a variety of purposes, including a dredge and fill program. The JBC would like to maintain fiscal control of this new program, although no draft language has been provided to that committee.
Severance Tax Funding
Severance tax, created by legislation in 1977, was intended to compensate the State for non-renewable, extracted mineral resources and simultaneously support local governments for the impacts created by energy production as well as the eventual economic impacts when those resources are depleted. The tax revenues are split equally between a State Fund and a Local Government Fund, which are then divided into smaller pots directed to specific purposes. Those purposes have included critical water projects from the Perpetual Base Fund, and Energy Impact Assistance grants to local communities.
The Governor’s proposed budget would sweep $70 million “excess” from both the State and Local Government funds, reducing the money flowing into those coffers. The current proposal is for the severance tax dollars to be transferred to the Capital Construction Fund, the Infrastructure and Jobs Investment and Jobs Act (IIJA) Cash Fund, and to the Department of Public Health & Environment to establish a new dredge and fill permit program.
The transfer of the monies accomplishes a couple of objectives, 1) reducing the need to appropriate General Fund dollars for those programs and 2) avoiding the requirement to set aside money in the Reserve Account that would otherwise be required for the appropriations. The Joint Budget Committee expressed concern with this plan and has not yet agreed to sponsor the legislation necessary to authorize the transfers. More to come on the shuffling of state dollars, which according to economic forecasts, will have only $23 million “extra” to accommodate new programs despite legislative recommendations to spend billions.
Fossil Fuels
Rep. Cathy Kipp (D-Fort Collins) plans to introduce a bill to repeal the severance tax exemption for stripper wells (those producing less than 15 barrels of oil or 90,000 cu/ft. per day of natural gas). The coal industry has already experienced a phase-down, phase-out of severance tax exemptions and credits.
Expanded Authority for AG?
The Attorney General’s office is pursuing legislation to enlarge its authority to seek temporary restraining orders, injunctions, or other necessary relief when they have reason to believe that a violation of statute or regulation will cause an imminent endangerment of public health, water quality, or the environment. Modeled after an Arizona statute, this language was amended on to individual bills last session, but was stripped off except for a bill affecting mobile home parks. Sponsors will be Reps. Junie Joseph (D-Boulder) and Jenny Wilford (D-Northglenn) along with Sen. Lisa Cutter (D-Jefferson County).
Air Quality draws multiple proposals.
The Colorado Dept. of Public Health and Environment (CDPHE) has listed its priorities for achieving Environmental Justice goals which coincides with proposals advanced by affected community groups Included in the priorities are 1) local control of air permits in cumulatively impacted communities; 2) cumulative impact and environmental equity analysis for certain permits (upon request, limited to two); 3) funding for additional compliance and enforcement staff in air, water and hazardous waste, The department also seeks additional money for increased lead testing for children and pregnant women, which is under scrutiny by the JBC.
There will likely be proposals to require CDPHE to provide increased modelling before issuing certain air permits. And permittees for air permittees will undoubtedly see increased fees as the Air Division seeks to stabilize the Stationary Sources program. The division’s request cites additional responsibility from legislation covering Air Toxics and Greenhouse Gases, programs which CMA has warned would drive significant resource needs. The request now is to transfer $30 million from the Energy and Carbon Management Cash fund (formerly Oil & Gas Conservation Commission).
In general, the JBC is being increasingly cautious about approving requests for additional money, questioning why the fiscal notes for specific programs did not highlight the need for additional future funding or may have “lowballed” the original fiscal impact. We more frequently hear them admonish departments to “live within your means”, harkening back to the limited amount ($23 million) available for new programs when in fact the proposals that will be coming before them far greater than that figure. This will be a session marked by fiscal fights as the one-time cash infusions from the federal government are halted.
Dianna Orf
CMA Lobbyist
