Colorado Legislative Council Staff

STATE and LOCAL

REVISED CONDITIONAL FISCAL NOTE

(replaces Fiscal Note dated March 16, 1998)

TABOR Refund Impact

State General Revenue and Cash Fund Expenditure Impact

Local Revenue Impact

TITLE:            CONCERNING ENFORCEMENT OF THE FEDERAL “SAFE DRINKING WATER ACT” BY THE DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT.

Summary of Legislation

            The provisions of the reengrossed bill would clarify requirements of the Department of Public Health and Environment (DPH&E) related to the enforcement of the federal “Safe Drinking Water Act”; including an expanded review of waterworks proposals, and a program for grants to assist local water providers in complying with requirements imposed under federal law. The reengrossed bill would require the DPH&E to implement the provisions of the bill within their current appropriations. As such, the bill would grant the statutory authority to the department related to enforcement of the federal act and to make drinking water grants, but without funding the grants program. The fiscal impact of the bill would be conditional upon the department submitting a request to the Capital Development Committee in FY 1999/2000 and their approval of such request.

            The DPH&E would require additional resources to implement the grant program for small public water systems, those systems that serve a population of not more than five thousand people. The bill also authorizes the DPH&E to assess administrative penalties, as required by federal law. Penalty revenues would be deposited in the General Fund. 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.

State Revenues

            The bill would authorize the executive director of the DPH&E to assess penalties for non-compliance with the drinking water regulations and to collect such penalties in a court of competent jurisdiction. The assessment of any such penalty may be appealed to the State Board of Health and would be subject to the potential review by the courts. It is estimated that approximately $15,000 would be collected in penalties and deposited in the General Fund in FY 1998/99 and FY 1999/2000. The actual amount of penalty revenues depends upon the structuring of the enforcement regulations. The department has indicated that its goal is to achieve compliance, not to assess penalties for non-compliance.

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

            It is the intent of the DPH&E to request funding from the Capital Development Committee to fund the grant program, so as to enable the Division of Administration to make grants for qualifying public water systems. The amount of money that would be expended for grants is conditional on the submission of qualifying grant requests and cannot be determined at this time.

            The DPH&E would require additional resources to implement the small community drinking water grant program. The bill would limit the amount of appropriated funds that may be used for administration and management of grant projects to 5 percent of the total appropriated funds.

            It is estimated that the department would require $74,313 Cash Funds and 1.5 FTE to administer grants and review new plans, beginning in FY 1999/2000. The amount of any future year expenditures would be conditional on continued funding of the program.

            The DPH&E has indicated that there are 163 communities in Colorado with populations of 5,000 or less that have an estimated financial need for new or improved drinking water treatment systems totaling $113,414,504. The Drinking Water Revolving Loan Fund program would provide a significant portion of the funding for these needed improvements. The grants provided by this bill would be used to assist those small communities that are not able to fully participate in the Drinking Water Revolving Loan Fund program because of their inability to repay such loans. Grants would help supplement funding that is provided in the revolving loan program.

Local Government Impact

            The provisions of this bill could result in an increase in grant revenues. The amount of the impact to local governments is conditional on the grant requests that are submitted and funded.

Spending Authority

            This fiscal note implies that the DPH&E, Division of Administration, would not require any additional appropriation in FY 1998/99 to implement the provisions of this bill.

Departments Contacted

            Public Health and Environment