Legislative Update: Teeing things up for January

The legislative interim committee have completed their work, moving recommended bills forward to the Legislative Council for approval prior to introduction in January. Throughout the summer and fall interim committees met for full days, hearing hours of presentations from a variety of interests seeking to inform about the status of various programs and technologies, as well as requesting introduction of legislation to benefit that particular interest. Following are recommendations of potential interest to CMA members.

The Tax Expenditure Evaluation Committee wrapped up its work on October 30, recommending five bills: Bill A requires future legislation that creates a new tax expenditure or extends an expiring tax expenditure to include tax preference performance statement and a defined repeal date providing a rationale for the preference and metrics to measure the effectiveness of the expenditure.

Bill B limits the state’s current sales and use tax exemption for purchases of lodging for more than 30 days such that the exemption applies only to stays by natural persons.

Bill C modifies the net operating loss deduction for C corporations. It limits the carryforward period for the deduction to 20years and makes financial institutions subject to the same carry forward periods as other Corporations.

Bill D creates a Legislative Oversight Committee concerning Tax Policy and a Task Force Concerning Tax Policy. The Task Force is established to study the effectiveness of existing tax expenditures and potential changes to tax policy, while the oversight committee, comprising only legislators, is authorized to sponsor legislation.

Bill E requires that energy sources used for industrial and manufacturing purposes be metered in order to qualify for the existing sales and use tax exemption. The bill amends 39-26-102 (21) C.R.S.

The Energy Legislation Review Committee held four meetings and conducted several trips, visiting Xcel Energy’s Control Center in downtown Denver, o various wind and solar operations, as well as the Pawnee coal-fired power plant and an Extraction Oil/Gas operation. They heard testimony from county officials and interested parties in Fort Morgan and Grand Junction as well as at the Capitol. At its final meeting on November 4, the committee recommended three bills to be submitted to Legislative Council for approval and introduction in January.

Bill 3 require that battery storage equipment be valued similarly to renewable energy generation equipment (e.g. wind and solar). This would be a cost valuation, which would impact a county’s property tax revenues.

Bill 4 requires standards for biodiesel blending from June to September. The bill was originally proposed year-round.

Bill 5 allows transmission lines carrying renewable energy to be located on conservation easements so long as it does not conflict with the purpose of the easement (protect wildlife, etc.). These are assumed to be new or expanded lines.

Bill 1 (providing excess TABOR revenues be refunded through incentives for clean energy projects) and Bill 2 (establishing a state electricity transmission authority) were withdrawn.

The Investor Owned Utility Committee was formed at the request of Senate President Leroy Garcia, who has long voiced concern over the electricity rates charged his constituents in Pueblo. Three bills were recommended by the committee Bill A directs the Public Utilities Commission (PUC) in the Department of Regulatory Agencies (DORA) to evaluate the viability of the wholesale opt-out model of community choice energy (CCE) in Colorado. CCE is defined as a mechanism that allows cities, counties, or groups of cities and counties, to combine their purchasing power and choose alternative electricity suppliers while the incumbent utility continues to own and operate the transmission and distribution system. The PUC is directed to study CCE through a third-party feasibility study and in a separate investigatory docket. Bill A carries a fiscal note of over $800 million, to be covered from the Fixed Utility fund paid by investor owned utilities.

Bill B requires conditional annual transfers from the General Fund to both the Energy Outreach Colorado (EOC) Low-income Energy Assistance Fund and the Colorado Energy Office (CEO) Low-income Energy Assistance Fund. Beginning in FY 2020-21. The transfers take place if the amount of severance tax revenue transferred to either fund in a year falls below $1.0 million. The amount transferred to either fund is 75 percent of the difference between $1.0 million and the amount of severance tax received for the year. General Fund transfers are authorized for four years and are repealed on September 1, 2024.

Bill C directs the PUC to require utilities under its authority to report on the number of the utility’s customers who receive the medical exemption from tiered electricity rates, and to describe the efforts the utilities have undertaken to enroll qualified individuals into the program on a periodic reporting basis beginning September 1, 2020. It also requires the PUC to open a proceeding to adopt standard practices for gas and electric utilities to use when disconnecting service due to nonpayment by September 1, 2020. The bill directs the PUC to open a non-adjudicatory proceeding to consider the merits of requiring utilities to report positive information about customer payment history to credit reporting agencies.