C.R.S. Section 25-7-103.5
Air quality enterprise

legislative declaration
fund
definitions
gifts, grants, or donations
rules
report
repeal

(1)

Legislative declaration.

The general assembly hereby finds and declares that:

(a)

Colorado faces numerous serious air quality challenges, which are having substantial adverse health and environmental impacts and impose additional burdens on Colorado’s economy;

(b)

The state of Colorado and stationary sources share the need for science-based air quality objectives that will require reductions in emissions of ozone precursors, greenhouse gases, and other pollutants;

(c)

Colorado residents and stationary sources will benefit from effective ozone control strategies that are informed by the best available science to avoid reclassification of areas in attainment to nonattainment status or reclassification from serious to a more stringent category of nonattainment that will impose additional regulatory requirements;

(d)

Enhanced monitoring techniques, capacity, and technology will provide better environmental results at a lower long-term cost;

(e)

Air quality monitoring conducted by an enterprise in areas with a high concentration of air pollution sources will provide trusted data on the overall impact of these air pollution sources on nearby residents, while providing a cost-effective method to monitor the emissions they produce;

(f)

Effective engagement with local communities often requires trusted third-party data and verification regarding emissions and environmental performance;

(g)

Improved monitoring of emissions, better accuracy of emission inventories, and access to trusted science will ensure a level competitive playing field for Colorado businesses;

(h)

Stationary sources in Colorado may seek air quality enterprise mitigation and monitoring services to implement their obligations under rules and permits and environmental, social, and governance objectives;

(i)

Emission mitigation and monitoring programs can be more effective with economies of scale and when conducted on a statewide or regional basis through an enterprise;

(j)

The air quality enterprise provides business services when, in exchange for payment of fees, it provides:

(I)

High-quality, independent, and trusted research and science regarding emissions rates and inventories, monitoring and control technologies, and health effects and emissions impacts;

(II)

High-quality, independent, and trusted data regarding pollutant emissions from stationary sources and concentrations to reduce waste of valuable products and resource streams, enhance cost-effective regulatory compliance, and support corporate environmental, social, and governance objectives;

(III)

Tools, data, and research for more effective community engagement on air pollution issues;

(IV)

Opportunities for trusted and cost-effective mitigation project development; and

(V)

Additional business services to fee payers as may be provided by law;

(k)

It is necessary, appropriate, and in the best interest of the state to acknowledge that, by providing the business services specified in this section, the enterprise engages in an activity conducted in the pursuit of a benefit, gain, or livelihood and therefore operates as a business;

(l)

Consistent with the determination of the Colorado supreme court in Nicholl v. E-470 Public Highway Authority, 896 P.2d 859 (Colo. 1995), that the power to impose taxes is inconsistent with enterprise status under section 20 of article X of the state constitution, it is the conclusion of the general assembly that the revenues collected by the enterprise are fees, not taxes, because the enterprise fees are:

(I)

Imposed for the specific purpose of allowing the enterprise to defray the costs of providing the business services specified in this section to fee payers; and

(II)

Collected at rates that are reasonably calculated based on the benefits received by those entities and the costs of the services the enterprise provides; and

(m)

So long as the enterprise qualifies as an enterprise for purposes of section 20 of article X of the state constitution, the revenue collected by the enterprise under subsection (4) of this section is not state fiscal year spending, as defined in section 24-77-102 (17), or state revenues, as defined in section 24-77-103.6 (6)(c), and does not count against either the state fiscal year spending limit imposed by section 20 of article X of the state constitution or the excess state revenues cap, as defined in section 24-77-103.6 (6)(b).

(2)

Definitions.

As used in this section, unless the context otherwise requires:

(a)

“Board” means the board of directors of the enterprise.

(b)

“Department” means the department of public health and environment.

(c)

“Enterprise” means the air quality enterprise created in subsection (3) of this section.

(d)

“Enterprise fee” or “fee” means money collected through fees authorized by subsection (4) of this section.

(e)

“Executive director” means the executive director of the department.

(f)

“Fund” means the air quality enterprise cash fund created in subsection (4) of this section.

(g)

“Greenhouse gas” has the meaning established in section 25-7-140 (6).

(3)

Enterprise.

(a)

There is hereby created in the department the air quality enterprise. The enterprise is and operates as a government-owned business within the department for the purpose of conducting the business activities specified in this section. The enterprise is a

type 1

entity, as defined in section 24-1-105, and exercises its powers and performs its duties and functions under the department.

(b)

The enterprise constitutes an enterprise for purposes of section 20 of article X of the state constitution so long as it retains the authority to issue revenue bonds and receives less than ten percent of its total revenues in grants from all Colorado state and local governments combined. So long as it constitutes an enterprise pursuant to this subsection (3)(b), the enterprise is not subject to section 20 of article X of the state constitution.

(c)

In addition to any other powers and duties specified in this section, the enterprise’s powers and duties are to:

(I)

Conduct science-based, unbiased air quality modeling, monitoring, assessment, data analysis, and research, which may include obtaining, analyzing, and reporting permitting and enforcement data; data regarding potential health risks from emissions; emission data; ambient air quality, visibility, and meteorological sampling data; and similar data. The board shall prioritize these activities based on a research project’s ability to provide information that will: Support tangible progress toward aiding fee payers’ obligations and commitments to reducing air pollutants emitted by the fee payers; support fee payers in attaining standards and health-based or environmental guidelines; and assess public health that may be affected by fee payer emissions. The board shall ensure that all research conducted by the enterprise and its contractors is impartial, transparent, and meets high standards for scientific rigor. The board shall consult with fee payers, atmospheric science and public health experts, engineers with air quality expertise, and community stakeholders on formulating research priorities and shall specifically prioritize:

(A)

Enhanced monitoring projects, including the placement of permanent monitoring stations using gas chromatography or proven, state-of-the-art technology to measure, in real time or nearly so, nitrogen oxides, volatile organic compounds, ozone, methane, and particulates at key locations upwind, downwind, and within high-emission regions;

(B)

Regular aerial surveys and observations to assist leak detection and repair activities, improve the accuracy of emission inventories, and create a better understanding of regional emission profiles; and

(C)

Assessing local exposures to and the public health risk impacts of nearby air toxics sources;

(II)

Establish the enterprise fees specified in subsection (4) of this section by rule and collect the fees;

(III)

Allocate enterprise revenues to the services described in this section and contract for any necessary services from state agencies or other parties, including universities, private entities, and federal laboratories;

(IV)

Issue revenue bonds payable from the revenues of the enterprise to implement its powers and duties;

(V)

Receive fees or other payments, including those negotiated to conduct emission mitigation projects and custom monitoring or technology development or evaluation projects;

(VI)

Engage the services of contractors, consultants, and legal counsel, including institutions of higher education, public research laboratories, private research institutions and consultants with expertise in air quality, the department, and the attorney general’s office, for professional and technical assistance, advice, and other goods and services, including information technology, related to the conduct of the affairs of the enterprise without regard to the “Procurement Code”, articles 101 to 112 of title 24. The board shall encourage diversity in applicants for contracts and shall generally avoid using single-source bids. The department may provide office space, administrative services, and staff pursuant to a contract entered into pursuant to this subsection (3)(c)(VI). The board may, in consultation with the executive director or the executive director’s designee, hire such other staff as it deems necessary to provide its business services.

(VII)

Promote the development of unbiased, high quality science and not advocate for or develop air quality policy. Consistent with this, the board shall not participate as a party in any air-quality-related rule-making proceedings or have any role in the implementation of Colorado’s air quality laws.

(VIII)

Receive payments to finance specific projects, including community-based monitoring or emission mitigation projects in the state or in a specified area of the state, as directed by this article 7 or any program that the commission establishes by rule pursuant to this article 7.

(d)

Intentionally left blank —Ed.

(I)

The enterprise is governed by a board of directors. The board consists of:

(A)

The executive director or the executive director’s designee;

(B)

The following members appointed by the governor: Two members of the commission; two representatives of fee payers with expertise in field engineering or environmental management; one member with significant private sector experience in the field of business management; and four members who are highly qualified and professionally active or engaged in the conduct of scientific research, including at least two who are experts in atmospheric or air quality modeling, monitoring, assessment, and research and one member who is a toxicologist, epidemiologist, pathologist, pulmonologist, cardiologist, or expert in a similar field related to the public health or environmental effects of air pollutants.

(II)

To the extent practicable, at least two of the governor appointees must be individuals who have a record of peer-reviewed publications and who are affiliated with, currently hold, or have held academic or equivalent appointments at universities, federal laboratories, or other research institutions.

(e)

The executive director or the executive director’s designee, in the capacity of a member of the board, shall call the first meeting of the board. The board shall elect a chair from among its members to serve for a term not to exceed two years, as determined by the board. The board shall meet at least quarterly, and the chair may call additional meetings as necessary for the board to complete its duties. The appointed members of the board are entitled to receive from money in the fund a per diem allowance of fifty dollars for each day spent attending official board meetings.

(f)

The term of office of appointed board members is three years.

(g)

The board shall conduct the enterprise’s business as required by state law, including the open meeting requirements of part 4 of article 6 of title 24 and the open record requirements of article 72 of title 24.

(4)

Fund - enterprise fees and other revenue.

(a)

There is hereby created in the state treasury the air quality enterprise cash fund. The fund consists of money credited to the fund pursuant to this subsection (4), payments for other purposes as authorized under subsection (3)(c)(VIII) of this section, and any other money that the general assembly may appropriate or transfer to the fund. The state treasurer shall credit all interest and income derived from the deposit and investment of money in the fund to the fund.

(b)

The board shall establish by rule enterprise fees, which may include the following enterprise fees in an amount that, in the aggregate, reflects the value of the services provided:

(I)

A fee per ton of air pollutant emitted by a stationary source annually, which fee may vary based on the air pollutant relative to the extent of research or mitigation needs associated with the pollutant;

(II)

A fee for custom or additional air quality modeling, monitoring, assessment, or research services; and

(III)

A fee for emission mitigation project services sought by fee payers.

(c)

Money in the fund is continuously appropriated to the enterprise to accomplish the purposes set forth in subsection (3)(c) of this section, including to:

(I)

Conduct and broadly disseminate air quality modeling, monitoring, assessment, data analysis, health risk assessment, and research related to stationary sources that:

(A)

Follow or advance best practices for risk assessment, risk management, monitoring, modeling, and assessment;

(B)

Use consistent, data-driven, and transparent processes for scoping and prioritizing activities; and

(C)

Use the best available scientific information;

(II)

Provide high-quality, independent, and trusted research and development services regarding stationary source emissions rates and inventories, monitoring and control technologies, and public health risk impacts from those emissions;

(III)

Provide high-quality, independent, and trusted data regarding pollutant emissions from stationary sources and concentrations to reduce waste of valuable products and resource streams, enhance cost-effective regulatory compliance, and support corporate environmental, social, and governance objectives;

(IV)

Provide trusted and cost-effective mitigation project services to meet corporate sustainability, settlement, and other objectives;

(V)

Provide additional business services to fee payers as may be provided by law; and

(VI)

Provide its data to fee payers, the division, and the commission to facilitate the fee payers’ emissions mitigation and compliance efforts and the division’s and commission’s enforcement and administration of this article 7.

(d)

The enterprise shall dedicate a meaningful portion of its annual revenues toward competitive grants to conduct highly qualified, peer-reviewed research related to research priorities identified by the board. Before finalizing a draft research product, the board shall post the draft on the board’s website and allow a period of time for public comment on the draft. The board shall publish the research products and make them and all data collected pursuant to enterprise-funded research publicly available.

(e)

Before establishing fees, the board shall conduct a stakeholder process to solicit input from potential fee payers and other stakeholders on the appropriate fee structure. The enterprise shall not collect any fees before July 1, 2021. The amount of enterprise fees collected under subsection (4)(b)(I) of this section is limited as follows:

(I)

For state fiscal year 2021-22, fees must not exceed one million dollars;

(II)

For state fiscal year 2022-23, fees must not exceed three million dollars;

(III)

For state fiscal year 2023-24, fees must not exceed four million dollars; and

(IV)

Intentionally left blank —Ed.

(A)

For state fiscal years commencing on or after July 1, 2024, fees must not exceed five million dollars.

(B)

Subsections (4)(e)(I) to (4)(e)(III) of this section and this subsection (4)(e)(IV)(B) are repealed, effective September 1, 2026.

(f)

The board may seek, accept, and expend gifts, grants, or donations from private or public sources for the purposes of this section.

(5)

Report.

Notwithstanding section 24-1-136 (11)(a)(I), the board shall provide a report to the committees of reference of the general assembly with jurisdiction over public health and the environment by December 1 of each year. The report must include summaries of the board’s prioritization of research needs; modeling, monitoring, assessment, and research accomplished by the enterprise; the enterprise’s completed, ongoing, and planned emission mitigation services; use of the fund; enterprise fees; and the value of business services provided to fee payers through the operation of the enterprise.

(6)

Repeal.

(a)

This section is repealed, effective September 1, 2034. Before the repeal, the enterprise is scheduled for review in accordance with section 24-34-104.

(b)

On September 1, 2034, the state treasurer shall transfer all unallocated money in the fund to the stationary sources control fund created in section 25-7-114.7 (2)(b)(I).

Source: Section 25-7-103.5 — Air quality enterprise - legislative declaration - fund - definitions - gifts, grants, or donations - rules - report - repeal, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-25.pdf (accessed Oct. 20, 2023).

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C.R.S. Section 25-7-103.5 Air quality enterprise

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C.R.S. Section 25-7-103.5
Air quality enterprise