Colorado Legislative Council Staff



No General Fund Impact

HUTF Revenue & Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-089

Rep. Swenson

Sen. Theibaut


Bill Status:

Fiscal Analyst:

January 3, 1998

House Transportation

Scott Nachtrieb (866-4752)



Summary of Legislation

            The bill would allow Ports of Entry personnel to inspect fuel tanks of motor vehicles and check for use of tax exempt dyed diesel fuel when vehicles stop at a Port of Entry weigh station. The operation of a vehicle using dyed fuel would also become illegal. Conviction of this offense would be a class B traffic infraction, make the violator subject to a Department of Revenue (DOR) audit, and the DOR would be required to notify the Internal Revenue Service of the violation. The single trip permit fee would also increase from $1 to $10. The bill will become effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution..


FY 1998/99

FY 1999/00

State Revenues

             Highway Users Tax Fund (HUTF)


$3,261,000 to $4,461,000

$3,261,000 to $4,461,000

State Expenditures

             HUTF Fund

             Federal Grant




FTE Position Change

3.9 FTE

3.9 FTE

Local Government Impact — Increased HUTF distributions to Local Governments

State Revenues

            Revenues to the HUTF would increase in the following three areas: an increase in special fuel taxes caused by increased compliance, increase in single trip permit fee from one dollar to ten dollars, and fines. Therefore, the bill is assessed as having a fiscal impact. The bill would increase the current one dollar fee for a single day trip permit to ten dollars. This nine dollar increase would apply to approximately 19,000 operators. The estimated increase in fees is $171,000 annually ($9 X 19,000).

            States that have adopted dyed fuel testing programs have experienced a five to seven percent increase in special fuel tax collections. It is estimated that Colorado would experience a similar increase in special fuel taxes. Colorado collected approximately $60 million in special fuel taxes in FY 1996-97. A five percent increase would generate approximately $3.0 million in additional special fuel tax collections. A seven percent increase would generate approximately $4.2 million in additional special fuel tax collections.

            The bill also would impose a fine of $100 and a twelve dollar surcharge for persons convicted of violating the new program one time a year. It is estimated that approximately 900 persons would be convicted of violating this bill annually. This would generate approximately $90,000 in fines annually to the HUTF. An estimated $10,800 would be collected from the twelve dollar surcharge which would go directly to the county with jurisdiction over the matter. Subsequent violations within a twelve month period would result in a $500 fine and a sixty dollar surcharge. Total estimated potential revenue to the HUTF could range between $3,261,000 and $4,461,000 annually.

            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

State Expenditures

            The Motor Carriers Services Division in the Department of Revenue would require 3.9 FTE and $112,763 HUTF as a result of this bill. Approximately $34,967 in program one-time startup costs would be funded by an existing federal grant. Startup costs provide training and fuel testing supplies. On-going operating costs would be minimal and provided within the division’s existing resources. Personal services would be for 2.9 FTE Port of Entry Officers ($90,169) to conduct an estimated 30,000 ten minute fuel tank inspections/tests and issue an estimated 900 citations for violations. An additional 1.0 FTE Administrative Assistant ($22,594) would be required to collect data on violators for audit purposes, maintain accounts, and develop a tracking system for the program.

Expenditures Not Shown

            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:


               health and life insurance costs; $8,624

               short-term disability costs; $226

               inflationary cost factors;

               leased space; and

               indirect costs.

Local Government Impact

            Cities and counties would receive additional HUTF distributions as a result of increased compliance with the special fuel tax. The additional revenues would be distributed to cities and counties using both of the current HUTF distribution formulas. County courts with jurisdiction over the citations would receive the additional surcharges.

Spending Authority

            This fiscal note implies that the Department of Revenue would require 3.9 FTE and $112,763 in HUTF spending authority for FY 1998-99 to implement this bill. The DOR does not requrie spending authority for the federal grant.

Departments Contacted       Revenue