Colorado Legislative Council Staff

STATE

REVISED FISCAL NOTE

(Replaces Fiscal Note dated March 17, 1998)

No State General Fund Impact

TABOR Refund Impact

Cash Fund Revenue and Expenditure Impact


Drafting Number:

Prime Sponsor(s):

LLS 98-063

Rep. Adkins

Sen. Norton

Date:

Bill Status:

Fiscal Analyst:

March 31, 1998

House 2nd Reading

Scott Nachtrieb (866-4752)

 

TITLE:      CONCERNING THE CREATION OF A VOLUNTARY ENVIRONMENTAL LEADERSHIP PROGRAM, AND, IN CONNECTION THEREWITH, CREATING AN ENVIRONMENTAL LEADERSHIP POLLUTION PREVENTION REVOLVING FUND AND ENACTING FINANCIAL INCENTIVES FOR POLLUTION PREVENTION, TOXIC USE REDUCTION, SOURCE REDUCTION, RESOURCE RECOVERY, ENERGY EFFICIENCY, AND INNOVATIVE ENVIRONMENTAL TECHNOLOGY ACTIVITIES FOR SUCH ENVIRONMENTAL LEADERS.


Summary of Legislation


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/00

State Revenues

   Leadership Pollution Prevention Revolving Fund (Secretary of State Cash Fund transfer)


$500,000


$500,000

State Expenditures

  Environmental Leadership Pollution Prevention Revolving Fund

       Administration

       Available for Loans


Secretary of State Cash Fund (transfer)

 Cash Fund Exempt (Department of Law)*


$500,000

$32,276

$465,804


$500,000

$1,920


$500,000

$30,096

$469,904

 

$500,000

$1,920

FTE Position Change

0.5 FTE

0.5 FTE

Local Government Impact — None

* The amount shown for the Department of Law is included in the Environmental Leadership Pollution Prevention Revolving Fund.


            This bill, as amended by the House Appropriations, February 10, 1998, and the House Finance Committee would authorize the Executive Director of the Department of Public Health and Environment to develop and implement a voluntary environmental leadership program to be administered by the Department. Mandatory program elements and application requirements for participation would be determined by the Executive Director, and would include elements identified in the bill. Entities applying to participate in the program would be able to select from among a list of alternative elective program elements. The number of elective program elements would be based on the size of the entity applying for participation. The program elements would be designed to result in the measurable improvement and enhancement of the environmental quality of the state, or activities that are deemed to be beneficial to the environment.


            The Executive Director of the Department of Public Health and Environment would establish application forms for the environmental leadership program. The Department would review all application proposals. If it is determined that a proposal meets the program requirements, the proposal would be incorporated into a written agreement. More than one agreement may be entered into per entity.


            Incentives would be established that may be granted to any entity that complies with all of the mandatory program elements, and the prescribed number of elective program elements. Incentives may include: formal public recognition; greater reliance by the Department on the entity’s self-monitoring, self-reporting, self-certification, or third-party certification to demonstrate continued compliance with environmental laws and permits; acceleration of review and processing of permit applications; ability to consolidate certain permit applications; consolidation and simplification of reporting requirements; extension of terms of environmental permits for up to ten years; and ability to obtain additional credits for reductions in emissions or discharges that exceed minimum legal requirements. In addition, the Executive Director may also establish and provide financial incentives including: dollar credits to be applied against future obligations of the entity under state environmental laws that are capped at $10,000 in 3 years; and dollar rebates or credits based on a percentage of permit and emission fees assessed under state environmental laws.


            The Revolving Fund Program would be established to provide low cost loans to entities. Loans would be funded from moneys credited to the Environmental Leadership Pollution Prevention Revolving Fund, which would consist of a transfer $500,000 in Secretary of State Cash Funds. The Department may solicit and accept gifts, donations, and grants for any purpose connected with the Revolving Fund Program. Interest derived from the deposit and investment of moneys in the fund would be credited to the fund, and would be subject to annual appropriation by the General Assembly.


            Environmental leaders would annually submit their certified expenditures for which they are seeking credit for the prior tax year to the Department of Public Health and Environment. On or before July 1, 1998, and each July 1 thereafter, the Department of Public Health and Environment would determine the eligibility of the pollution prevention, source reduction, toxic use reduction, resource recovery, energy efficiency, or innovative environmental technology investment and certify the amount of the investment that would be eligible for an income tax credit. The income tax credit provisions were eliminated from the bill.


            The bill is assessed as having a state cash fund revenue and expenditure fiscal impact. The bill would become effective upon the signature of the Governor.


State Revenues


            The state revenue impact would be a transfer of $500,000 in Secretary of State Cash Funds to the Environmental Leadership Pollution Prevention Revolving Fund. The provisions that created an income tax credit have been removed.


            Fine and Penalty Revenues. The provision which would have allowed for the transfer of awards and penalties from the General Fund to the Environmental Leadership Pollution Prevention Revolving Fund were removed.


TABOR Refund Impact


            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 or decrease 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 Department of Health and Environment would have additional expenditures from the administration of the Environmental Leadership Program. This would require $32,276 annually and 0.5 FTE. Personal services costs would be $27,896 and 0.5 FTE, operating expenses would be $280, $2,900 would be for capital outlay, $1,200 would be for computers, and $1,920 would be for legal services from the Department of Law.


Estimated DPHE Expenditures

 

FY 1998-99

FY 1999-2000

Personal Services

$27,896

$27,896

Operating Expenses

280

280

Legal Expenses

1,920

1,920

Capital Outlay

4,100

0

Total Expenses

$34,196

$30,096



            The bill transfers $500,000 in Secretary of State Cash Fund revenues to the Environmental Leadership Pollution Prevention Revolving Fund. These funds would be used for low cost loans to entities. It is assumed that the revenues available for this purpose will be loaned on an annual basis, and will be paid back in a timely manner by the borrowers.



 

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; $1,008

               short-term disability costs; $55

               inflationary cost factors;

               leased space; and

               indirect costs.


Spending Authority


            The bill contains a no appropriations clause and therefore no spending authority would be required. However, the workload for the Department of Public Health and Environment would increase as a result of this bill. The department would adjust resources and workloads to accommodate the increase. The Department of Public Health and Environment would require cash fund spending authority in the amount of $500,000 from the Environmental Leadership Pollution Prevention Revolving Fund in FY 1998-99. Of that amount, $32,276 and 0.5 FTE would be for administrative purposes. Of the administrative money, the Department of Law would require a cash fund exempt spending authority of $1,920 for legal services.


Departments Contacted


            Revenue          Health & Environment           State Treasurer