Second Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06-0848.01 Duane Gall HOUSE BILL 06-1322 HOUSE SPONSORSHIP Buescher, SENATE SPONSORSHIP Tapia, House Committees Senate Committees Finance A BILL FOR AN ACT Concerning support for the development of clean energy resources using proceeds of the operational account of the severance tax trust fund. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Transfers $6 million per year for 3 years from the operational account of the severance tax trust fund into a newly created clean energy development fund, to be administered by the governor's office of energy management and conservation for the following purposes:  To support the study, engineering, and development of an integrated gasification combined-cycle generation facility that will demonstrate the feasibility of new technologies that use Colorado or other western coal, or both, and that will capture and sequester a portion of the facility's carbon dioxide emissions (funded at up to $3 million of the $6 million per year);  As seed money for the development of new energy technologies that rely upon renewable or other clean energy resources for the production of electrical energy or liquid fuels suitable for use in the transportation sector; and  To facilitate the development of renewable energy or energy efficiency resources at public schools, public hospitals, state government agencies, county and municipal governments, and other public entities. Directs the office of energy management and conservation to develop criteria for awarding grants from the clean energy development fund. Requires annual reports to the governor and the general assembly. Repeals the program after 3 years, with any unexpended and unencumbered moneys then reverting to the general fund. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 39-29-109, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read: 39-29-109. Severance tax trust fund - created - administration - use of moneys - definitions - repeal. (1.7) (a) Notwithstanding any provision in this section to the contrary, for three state fiscal years beginning with the state fiscal year commencing on July 1, 2005, a portion of the operational account of the severance tax trust fund shall be transferred to the clean energy development fund created in section 24-22-118, C.R.S. The amount transferred shall be six million dollars per year, subject to the limitations stated in said section. (b) This subsection (1.7) is repealed, effective July 1, 2008. SECTION 2. Article 22 of title 24, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 24-22-118. Clean energy development fund - creation - use of moneys - repeal. (1) There is hereby created in the state treasury the clean energy development fund, also referred to in this section as the "fund". The purposes of the fund are to provide financial support for the study, engineering, and development of an integrated gasification combined-cycle electric generation facility that will demonstrate the feasibility of advanced clean coal technologies, as well as to fund other renewable energy and energy conservation efforts, in a manner consistent with this section. (2) For the state fiscal year commencing on July 1, 2005, and in each of the state fiscal years commencing on July 1, 2006, and July 1, 2007, the general assembly shall appropriate six million dollars from the fund as follows: (a) Three million dollars, or so much thereof as is necessary, shall be appropriated to the governor's office of energy management and conservation for the study, engineering, and development of an integrated gasification combined-cycle electric generation facility that will demonstrate the feasibility of using advanced clean coal technology and that will demonstrate the capture and sequestration of a portion of the facility's carbon dioxide emissions using Colorado or other western coal, or both, as contemplated by section 40-2-123 (2), C.R.S.; (b) Three million dollars, plus any unencumbered and unexpended balance remaining from the three million dollars identified in paragraph (a) of this subsection (2), shall be appropriated to the office of the governor to be used by the office of energy management and conservation to make grants in accordance with subsection (3) of this section. (3) (a) The office of energy management and conservation shall use moneys it receives pursuant to paragraph (b) of subsection (2) of this section to provide: (I) Seed money for the development of new energy technologies that rely upon renewable or other clean energy resources for the production of electrical energy or liquid fuels suitable for use in the transportation sector; and (II) Financial support for the development of renewable energy or energy efficiency measures at public schools, public hospitals, state government agencies, county and municipal governments, and other public entities. (b) The office of energy management and conservation shall develop and administer a process by which persons and entities may apply for grants from the fund. Such process shall include objective criteria for the consideration of competing proposals. (c) For each fiscal year in which moneys are expended pursuant to this section, the office of energy management and conservation shall prepare and submit to the general assembly an annual report that specifies: (I) How the moneys were expended; (II) The expected energy savings and other benefits from proposals that were funded; and (III) Recommendations for any future programs of this nature. (d) If, in any fiscal year, the office of energy management and conservation determines that it cannot use all of the moneys it receives pursuant to this section, the office shall notify the governor and the joint budget committee of the general assembly of such fact. Upon notification, the general assembly may make a supplemental appropriation to reduce the amount appropriated to the office and increase the amount appropriated for other energy conservation or energy efficiency measures. (4) As used in this section, unless the context otherwise requires: (a) "Energy efficiency measures" means measures that reduce consumption of fossil fuels or electricity. (b) "Office of energy management and conservation" means the office of energy management and conservation within the office of the governor, or any successor office that is created within the office of the governor for the purpose of promoting energy management or conservation. (5) This section is repealed, effective July 1, 2008. Any unexpended and unencumbered moneys remaining in the clean energy development fund as of June 30, 2008, shall revert to the general fund. SECTION 3. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.