Front range waste diversion enterprise - legislative declaration - fund goals - grant program - personal property tax reimbursements - gifts, grants, or donations - definitions - repeal.

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(1) Legislative declaration. The general assembly hereby:

(a) Finds that:

  1. Colorado has one of the lowest rates of waste diversion in the United States, recycling only about twelve percent of our waste compared to thirty-five percent nationwide;

  2. Colorado disposed of a record amount of trash in landfills in 2017, over nine milliontons, while there was essentially no increase in the municipal waste diversion rate;

  3. Recycling, reuse, and remanufacturing contribute almost nine billion dollars to theColorado economy annually, yet we are throwing away more than one-quarter billion dollars worth of recyclable material such as aluminum, cardboard, paper, glass, and plastics annually in our landfills, which material could have been recycled here in Colorado, thereby creating local jobs and strengthening local economies;

  4. Recycling creates an average of nine times more jobs per ton of waste than doesdisposal in a landfill, and it is one of the fastest, easiest, and most cost-effective ways to reduce greenhouse gas emissions;

  5. The front range:

  1. Generates about eighty-five percent of the waste statewide and has most of the infrastructure in place to divert waste from landfills; and

  2. Has higher densities of waste generators and recycling facilities than the rest of thestate and thus fewer challenges regarding long distances to recycling facilities and markets; and

(VI) To support waste diversion efforts, the average family living along the front range pays about eighty-six cents per year in the form of user fees assessed at fourteen cents per cubic yard of waste disposed of at attended landfills, which fees are used to support waste diversion efforts;

(b) Determines that:

(I) Waste diversion has substantial economic and environmental benefits for the state; (II) The opportunity for improvement is great, yet the front range lacks:

  1. A sufficient funding source to make these improvements; and

  2. Coherent waste diversion policy at the local level; and

(III) It is in the state's interest to provide financial and technical assistance to communities to reach their waste diversion goals through a competitive grant program financed by an increase in user fees; and (c) Declares that:

  1. Providing a waste diversion grant program constitutes a valuable service and benefit,and the front range waste diversion enterprise provides useful business services to waste generators when, in exchange for payment of increased user fees, it issues grants financed by the fees to entities that promote waste diversion;

  2. It is necessary, appropriate, and in the best interest of the state to acknowledge thatby providing the business services specified in subsections (1)(b)(III) and (1)(c)(I) of this section, the enterprise engages in an activity conducted in the pursuit of a benefit, gain, or livelihood and therefore operates as a business;

  3. Consistent with the determination of the Colorado supreme court in Nicholl v. E470 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 user fee collected by the enterprise is a fee, not a tax, because the fee is imposed for the specific purpose of allowing the enterprise to defray the costs of providing the business services specified in subsections (1)(b)(III) and (1)(c)(I) of this section to waste generators that ultimately pay the fee and is collected at rates that are reasonably calculated based on the benefits received by those waste generators;

  4. So long as the enterprise qualifies as an enterprise for purposes of section 20 ofarticle X of the state constitution, the revenue from the user fees collected by the enterprise 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)(I)(B); and

  5. This section is necessary to provide incentives to local governments, for-profit wastemanagement and waste diversion companies, institutions of higher education, and nonprofit waste diversion organizations.

(2) Definitions. As used in this section, unless the context otherwise requires: (a) "Board" means the board of directors of the enterprise.

  1. "Diversion" means waste reduction and the activities specified in section 25-16.5106.7 (4).

  2. "Eligible entity" means the following entities located or providing services in thefront range:

  1. Municipalities, counties, and cities and counties;

  2. Nonprofit and for-profit businesses involved in waste disposal or diversion; and(III) Institutions of higher education and public or private schools.

  1. "Enterprise" means the front range waste diversion enterprise created in subsection(3) of this section.

  2. "Fee" or "fees" means money collected by means of the user fee authorized by section 25-16-104.5 (3.9)(c).

  3. "Front range" means the counties of Adams, Arapahoe, Boulder, Douglas, Elbert, ElPaso, Jefferson, Larimer, Pueblo, Teller, and Weld and the cities and counties of Broomfield and Denver.

  4. "Fund" means the front range waste diversion cash fund created in subsection (4) ofthis section.

  5. "Grant program" means the front range waste diversion grant program created insubsection (6) of this section.

(3) Enterprise. (a) There is hereby created in the department the front range waste diversion enterprise. The enterprise is and operates as a government-owned business within the department for the purpose of collecting the fee charged to waste generators and using the fee to provide grants and technical assistance to promote waste diversion. The enterprise exercises its powers and performs its duties and functions under the department as if transferred to the department by a type 1 transfer, as defined in the "Administrative Organization Act of 1968", article 1 of title 24.

  1. The enterprise constitutes an enterprise for purposes of section 20 of article X of thestate 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.

  2. The enterprise's primary powers and duties are to:

  1. Collect the fee;

  2. Promote waste diversion by providing technical assistance and issuing grants as specified in subsection (6) of this section;

  3. Issue revenue bonds payable from the revenues of the enterprise to promote thewaste diversion purposes specified in this section;

  4. Publish each year, on the department's website and as otherwise deemed appropriate by the board, the waste diversion strategies that the board has prioritized for funding through the grant program;

  5. Adopt, amend, or repeal policies for the regulation of its affairs and the conduct ofits business consistent with this section, including establishing application, review, approval, reporting, and other requirements for grants; and

  6. Engage the services of contractors, consultants, and legal counsel, including thedepartment and the attorney general's office, for professional and technical assistance and advice and to supply other services 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 shall provide office space and administrative staff to the enterprise pursuant to a contract entered into pursuant to this subsection (3)(c)(VI).

(d) The enterprise is governed by a board of directors. The board consists of the following thirteen members appointed by the executive director of the department:

  1. One member representing the Colorado office of economic development;

  2. Two members representing the department, one with expertise in sustainability andone with expertise in compliance;

  3. Two members representing front range municipalities;

  4. Two members representing front range counties; and

  5. Six members, balanced equally, to the extent practicable, among representatives offront range nonprofit and for-profit entities engaged in recycling, reuse, or composting activities, including a large waste hauler or landfill operator, a small waste hauler or landfill operator, a publicly owned landfill operator, a composter, a construction and demolition recycler, a materials recovery facility operator, and any other entity that has knowledge in promoting reuse, recycling, or composting.

  1. The member appointed pursuant to subsection (3)(d)(II) of this section with expertisein sustainability 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. Each member of the board is entitled to receive from money in the fund a per diem allowance of fifty dollars for each day spent attending official board meetings.

  2. The term of office of board members is three years; except that the initial terms ofmembers appointed pursuant to subsection (3)(d)(V) of this section are two years.

(4) Fund. (a) There is hereby created in the state treasury the front range waste diversion cash fund. The fund consists of money credited to the fund pursuant to sections 25-16104.5 (3.9)(c) and 18-4-511 (4)(b) 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) Money in the fund is continuously appropriated to the enterprise to:

  1. Administer the grant program;

  2. Award grants in accordance with this section;

  3. Provide technical assistance to eligible entities to promote diversion, including through the development and implementation of policy; and

  4. (A) Reimburse, at the board's discretion, eligible recycling businesses for locallyassessed personal property taxes paid in the current tax year in this state on personal property that is located in the front range. The first eighteen thousand dollars in actual value that is otherwise eligible for the income credit authorized by section 39-22-537.5 is not eligible for reimbursement.

(B) A person that applies for reimbursement pursuant to this subsection (4)(b)(IV) must inform the enterprise, in a form and manner specified by the enterprise, of the type of business personal property that was subject to the taxes and how the property will help develop recycling markets.

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

(5) Waste diversion goals. The enterprise shall administer the grant program and provide technical assistance to achieve the following municipal waste diversion goals within the front range:

  1. Thirty-two percent diversion by 2021;

  2. Thirty-nine percent diversion by 2026; and(c) Fifty-one percent diversion by 2036.

(6) Grant program. (a) The enterprise shall administer the front range waste diversion grant program and, subject to available appropriations and revenues, shall award grants from the fund as provided in this subsection (6).

(b) The purpose of the grant program is to achieve the goals specified in subsection (5) of this section by providing economic and technical assistance to eligible entities in their efforts to reduce waste, recover valuable resources, and increase the diversion of municipal and nonmunicipal solid waste materials, including mattresses, construction and demolition waste, electronics, appliances, and organic waste. The board shall establish criteria used to evaluate and prioritize applications for grants, based on the current most effective and relevant waste diversion strategies or policies, including:

  1. Implementing pay-as-you-throw rate structures for residential single-family recycling;

  2. Increased recycling service for commercial-sector businesses;

  3. Curbside recycling for residents, with the recycling fee embedded in the residents'bills;

  4. Collection of organics such as yard waste and food waste from residents and foodservice businesses;

  5. Policies and programs to expand construction and demolition recycling;

  6. The standardization of diversion policies and practices, to the extent practicable,including through the use of similar signage, colors, and bins and holding periodic diversion events at predictable times and places;

  7. The remediation of illegal waste disposal sites; and

  8. Systems to track diversion rates, based on best practices developed by the boardand the department, and strategic materials management plans on the local and regional levels.

(c) (I) An eligible entity may submit an application to the enterprise for a grant pursuant to the policies and procedures specified by the board. An eligible entity may apply even if the entity has already reached the diversion goals set out by the integrated solid waste and materials management plan, as amended, adopted by the solid and hazardous waste commission created in section 25-15-302 if approving the application will further reduce waste, recover valuable resources, and increase diversion. At a minimum, an application must include the following information:

  1. An application narrative that describes the project to be financed by the grant, including a demonstration of how the project promotes achievement of the diversion goals specified in subsection (5) of this section and the criteria established by the board;

  2. The amount of in-kind contributions or matching funds, if any, to the project budgetfrom the applicant or other sources outside of the grant; and

  3. Whether there is local community support for the grant application.

(II) The policies and procedures specified by the board must include the following limitations for grant applicants that are either a waste hauler or a landfill owner or operator, which the board shall apply only to the portions of an application that relate to infrastructure or equipment:

  1. Only fifty percent of infrastructure or equipment can be funded through the grantprogram;

  2. If the board awards a grant to a waste hauler or landfill owner or operator for infrastructure or equipment, the grantee is ineligible to receive a grant for the following five years.

  1. Grant recipients may use the money received through the grant program for staffing,supplies, equipment, marketing and communications, policy research and development, community engagement, and programming and services related to the criteria established by the board.

  2. The board shall:

  1. Use its best efforts to award grants within ninety days after receipt of applications;

  2. Not allocate more than twenty percent of the annual fund revenue in any single grantaward;

  3. Include a scope of work, including mileposts and deadlines for achievement of specified goals, in grant award agreements; and

  4. Determine the criteria for measuring progress, which may include diversion rates,participation rates, and other qualitative and quantitative methods. The board shall consider a grantee's progress in issuing further grants to the grantee.

(f) (I) A grantee shall report annually to the board on the progress of the project financed by the grant pursuant to terms specified in the grant award agreement.

(II) The board shall develop a policy regarding a grantee's noncompliance with the grant agreement entered into by the grantee and the board, which policy may include a mechanism for the board to convert the grantee's grant to a loan with interest.

(7) Reporting. Notwithstanding section 24-1-136 (11)(a)(I), the board shall submit a report by July 1 of each year to the committees of reference of the general assembly with jurisdiction over the environment regarding:

  1. The unobligated balance of the fund, the number of grant applications, and the number of grants awarded;

  2. The eligible entities that have applied for a grant, the actions taken by each grantee,their diversion rates and other measurements of success, and the amount of grant money distributed to each grantee;

  3. The progress toward achievement of the diversion goals specified in subsection (5) ofthis section and the primary factors facilitating and inhibiting that progress; and (d) Any suggested legislation or policy changes.

(8) Repeal. (a) This section is repealed, effective September 1, 2029.

(b) The state treasurer shall transfer any money remaining in the fund on September 1, 2029, to the general fund.

Source: L. 2019: Entire section added, (SB 19-192), ch. 362, p. 3344, § 1, effective August 2. L. 2020: (4)(b)(II) and (4)(b)(III) amended and (4)(b)(IV) added, (SB 20-055), ch. 289, p. 1432, § 5, effective September 14.

Editor's note: Section 8 of chapter 289 (SB 20-055), Session Laws of Colorado 2020, provides that the act changing this section applies to conduct occurring on or after September 14, 2020.


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