Local Government Renewable Energy Development Fee

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO INTRODUCED SENATE BILL 26-082 LLS NO. 26-0525.01 Jacob Bennington x2371 SENATE SPONSORSHIP Pelton B., HOUSE SPONSORSHIP (None), Senate Committees House Committees Transportation & Energy A BILL FOR AN ACT CONCERNING THE PROCESS BY WHICH A LOCAL GOVERNMENT CONTROLS THE DEVELOPMENT OF RENEWABLE ENERGY PROJECTS, AND, IN CONNECTION THEREWITH, AUTHORIZING A LOCAL GOVERNMENT TO IMPLEMENT AN OPTIONAL TWO-TIER APPLICATION FEE PROGRAM AND A SUCCESS FEE.

Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) A renewable energy project developer (facility owner) that intends to undertake a project to build a renewable energy facility (renewable Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

energy project) may currently submit an application for land use approval from the renewable energy project to a local government. However, current law does not specify what process a local government may use to charge fees or set a timeline for the local government to make a final decision regarding land use approval for the renewable energy project. The bill specifies that control over the specifics of the application process rests with the local government. The local government may establish fees for an application for a renewable energy project and may offer two independent tracks for the application based on the fee the facility owner pays. The standard track allows a facility owner to pay a lower fee, but does not guarantee a specific timeline for the local government to issue a final decision on the application. The expedited track allows a facility owner to pay an additional fee, with an agreement that if the local government takes longer than 120 days, minus any permitted tolling periods, a percentage of the higher fee will be refunded. The bill gives local governments authority to contract with third-party technical reviewers to review the application for a final decision. The bill also requires a facility owner to pay a success fee to the local government upon final approval of the project, based on the amount of time between receipt of the application and when the project is approved, to be used by the local government for expenses related to regulating renewable energy facilities and maintaining local roads impacted by facility construction.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1. In Colorado Revised Statutes, add 29-20-406 as follows:

29-20-406. Renewable energy project fees - local authority - fast-track program - refund - reporting - legislative declaration - definitions.

(1) (a) THE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES THAT:

(I) COLORADO HAS LONG RECOGNIZED THAT LAND USE IS A LOCAL FUNCTION, AND COUNTIES ARE BEST POSITIONED TO BALANCE ENERGY DEVELOPMENT WITH COMMUNITY IMPACTS; AND

(II) FACILITIES CAN CREATE SIGNIFICANT LOCAL IMPACTS ON ROADS, EMERGENCY SERVICES, AND THE ENVIRONMENT THAT ARE MOST DIRECTLY BORNE BY LOCAL GOVERNMENTS AND RESIDENTS.

(b) THEREFORE, IT IS THE INTENT OF THE GENERAL ASSEMBLY TO:

(I) REAFFIRM THAT LOCAL GOVERNMENTS RETAIN AUTHORITY TO APPROVE, CONDITION, OR DENY PROJECTS THROUGH LOCAL LAND USE PROCESSES;

(II) CREATE A VOLUNTARY STRUCTURE THAT INCENTIVIZES FASTER, PREDICTABLE LOCAL PERMITTING BY ALLOWING LOCAL GOVERNMENTS TO RETAIN HIGHER FACILITY OWNER-PAID FEES WHEN STATUTORY TIMELINES ARE MET; AND

(III) ENSURE PROJECTS CONTRIBUTE FAIRLY AND PREDICTABLY TO LOCAL FISCAL IMPACTS THROUGH A SUCCESS FEE CHARGED ON FINAL APPROVAL OF THE PROJECT.

(2) (a) THE POWER AND AUTHORITY GRANTED BY THIS SECTION DOES NOT LIMIT ANY POWER OR AUTHORITY PRESENTLY EXERCISED BY A LOCAL GOVERNMENT.

JURISDICTION HAS THE AUTHORITY TO:

GOVERNMENT (I) OR PREVIOUSLY GRANTED TO A LOCAL EACH LOCAL GOVERNMENT WITHIN ITS RESPECTIVE DEVELOP A UNIFORM ELECTRONIC APPLICATION AND PERMITTING SYSTEM FOR FACILITY OWNERS APPLYING FOR LAND USE APPROVAL TO DEVELOP A RENEWABLE ENERGY PROJECT;

(II) CREATE A STANDARD PERMIT APPLICATION PROCESS, AS WELL AS ESTABLISH AND COLLECT A STANDARD FEE FROM FACILITY OWNERS;

(III) CREATE AN EXPEDITED PERMIT APPLICATION PROCESS, AS WELL AS ESTABLISH AND COLLECT AN EXPEDITED FEE FROM FACILITY OWNERS; AND

(IV) ESTABLISH AND COLLECT A SUCCESS FEE FROM FACILITY OWNERS AFTER A LOCAL GOVERNMENT APPROVES A RENEWABLE ENERGY PROJECT.

(b) A PERMITTING AND APPLICATION SYSTEM DEVELOPED BY A LOCAL GOVERNMENT PURSUANT TO THIS SUBSECTION (2) MUST COMPLY WITH SUBSECTIONS (3) THROUGH (7) OF THIS SECTION.

(3) A FACILITY OWNER THAT INTENDS TO DEVELOP A RENEWABLE ENERGY PROJECT MAY SUBMIT EITHER A STANDARD PERMIT APPLICATION OR, IF ESTABLISHED BY THE LOCAL GOVERNMENT, AN EXPEDITED PERMIT APPLICATION TO THE LOCAL GOVERNMENT IN ACCORDANCE WITH THE PROCEDURES DEVELOPED BY THE LOCAL GOVERNMENT PURSUANT TO SUBSECTION (2) OF THIS SECTION.

(4) (a) FOR EXPEDITED PERMIT APPLICATIONS RECEIVED BY THE LOCAL GOVERNMENT ON OR AFTER JANUARY 1, 2027, EXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION (4), THE LOCAL GOVERNMENT SHALL ISSUE A DETERMINATION OF WHETHER THE APPLICATION IS COMPLETE WITHIN TWENTY DAYS AFTER RECEIVING THE APPLICATION. THE LOCAL GOVERNMENT SHALL NOTIFY THE FACILITY OWNER IN WRITING WHETHER THE APPLICATION IS COMPLETE.

(b) A DETERMINATION THAT AN APPLICATION IS NOT COMPLETE MUST INCLUDE A CONSOLIDATED DEFICIENCY NOTICE WITH A LIST OF ALL MISSING OR INCOMPLETE ITEMS THAT THE FACILITY OWNER MUST CORRECT FOR THE APPLICATION TO BE DEEMED COMPLETE.

(c) (I) AN APPLICATION SUBMITTED TO A LOCAL GOVERNMENT PURSUANT TO SUBSECTION (3) OF THIS SECTION IS DEEMED APPROVED BY THE LOCAL GOVERNMENT IF THE LOCAL GOVERNMENT HAS NOT, WITHIN TWENTY DAYS AFTER RECEIPT OF THE APPLICATION, NOTIFIED THE FACILITY OWNER PURSUANT TO SUBSECTION (4)(a) OF THIS SECTION WHETHER THE APPLICATION IS COMPLETE.

(II) IF THE LOCAL GOVERNMENT DETERMINES AN APPLICATION IS NOT COMPLETE, THE LOCAL GOVERNMENT MAY HAVE AN ADDITIONAL THIRTY DAYS AFTER PROVIDING INITIAL NOTICE THAT THE APPLICATION IS INCOMPLETE TO PROVIDE THE CONSOLIDATED DEFICIENCY NOTICE.

(5) IF AN APPLICATION IS DEEMED INCOMPLETE, THE FACILITY OWNER HAS THIRTY DAYS FROM THE DATE THAT THE LOCAL GOVERNMENT PROVIDED THE CONSOLIDATED DEFICIENCY NOTICE TO CURE ANY DEFICIENCIES IDENTIFIED IN THE CONSOLIDATED DEFICIENCY NOTICE OR TO APPEAL THE DETERMINATION.

(6) (a) THE EXPEDITED PERMIT FEE CONSISTS OF THE STANDARD FEE, AS WELL AS AN ADDITIONAL CHARGE THAT THE LOCAL GOVERNMENT SHALL REFUND TO THE FACILITY OWNER AS FOLLOWS:

(I) IF THE LOCAL GOVERNMENT ISSUES A FINAL DECISION WITHIN ONE HUNDRED TWENTY DAYS OR FEWER AFTER RECEIPT OF THE APPLICATION, ZERO PERCENT OF THE ADDITIONAL CHARGE IS REFUNDED TO THE FACILITY OWNER;

(II) IF THE LOCAL GOVERNMENT ISSUES A FINAL DECISION BETWEEN ONE HUNDRED TWENTY-ONE DAYS AND ONE HUNDRED EIGHTY DAYS AFTER RECEIPT OF THE APPLICATION, FIFTY PERCENT OF THE ADDITIONAL CHARGE IS REFUNDED TO THE FACILITY OWNER;

(III) IF THE LOCAL GOVERNMENT ISSUES A FINAL DECISION BETWEEN ONE HUNDRED EIGHTY-ONE DAYS AND TWO HUNDRED FORTY DAYS AFTER RECEIPT OF THE APPLICATION, SEVENTY-FIVE PERCENT OF THE ADDITIONAL CHARGE IS REFUNDED TO THE FACILITY OWNER; OR

(IV) IF THE LOCAL GOVERNMENT ISSUES A FINAL DECISION MORE THAN TWO HUNDRED FORTY DAYS AFTER RECEIPT OF THE APPLICATION, ONE HUNDRED PERCENT OF THE ADDITIONAL CHARGE IS REFUNDED TO THE FACILITY OWNER.

(b) IN DETERMINING THE AMOUNT OF THE ADDITIONAL CHARGE FOR AN EXPEDITED APPLICATION THAT A LOCAL GOVERNMENT MUST REFUND PURSUANT TO SUBSECTION (6)(a) OF THIS SECTION, THE LOCAL GOVERNMENT SHALL NOT INCLUDE ANY PORTION OF THE THIRTY-DAY CURE PERIOD IN THE CALCULATION OF THE TIME IT TAKES FOR THE LOCAL GOVERNMENT TO ISSUE A FINAL DECISION.

(7) (a) IF A FACILITY OWNER HAS SUBMITTED AN EXPEDITED PERMIT APPLICATION, THE LOCAL GOVERNMENT SHALL SELECT AND HIRE A QUALIFIED AND INDEPENDENT NONGOVERNMENTAL CONTRACTOR UNDER THE DIRECTION OF THE LOCAL GOVERNMENT TO PROVIDE THE LOCAL GOVERNMENT WITH TECHNICAL ASSISTANCE IN REVIEWING THE APPLICATION.

(b) AN INDEPENDENT NONGOVERNMENTAL CONTRACTOR THAT PROVIDES TECHNICAL ASSISTANCE PURSUANT TO THIS SUBSECTION (7) MAY ASSIST THE LOCAL GOVERNMENT WITH SOME OR ALL OF THE FOLLOWING, AT THE LOCAL GOVERNMENT'S DISCRETION:

(I) PROPOSAL;

(II) DETERMINATION;

(III) DEFICIENCY NOTICE;

REVIEWING THE FACILITY OWNER'S APPLICATION AND PREPARING THE LOCAL GOVERNMENT'S COMPLETENESS PREPARING THE LOCAL GOVERNMENT'S CONSOLIDATED

(IV) PROVIDING RESPONSES TO A FACILITY OWNER'S APPEAL OF ANY ITEM IN A CONSOLIDATED DEFICIENCY NOTICE; AND

(V) PREPARING A FINAL DECISION ON THE FACILITY OWNER'S APPLICATION.

(c) THE FACILITY OWNER SHALL BEAR THE INDEPENDENT NONGOVERNMENTAL CONTRACTOR'S ASSISTANCE PROVIDED PURSUANT TO THIS SECTION AND SHALL REMIT PAYMENT FOR THE COSTS TO THE LOCAL GOVERNMENT, WHICH SHALL PAY THE CONTRACTOR. THE LOCAL GOVERNMENT MAY CHARGE THE FACILITY OWNER AN ADDITIONAL FEE IN AN AMOUNT NOT TO EXCEED TEN PERCENT OF THE COST OF THE CONTRACT WITH THE CONTRACTOR FOR CONTRACT ADMINISTRATION, PROCESSING.

TECHNICAL COSTS REVIEW, AND FOR ANY TECHNICAL ADDITIONAL PERMIT

(d) (I) THE LOCAL GOVERNMENT, IN ITS SOLE DISCRETION, SHALL PROVIDE OVERSIGHT TO ENSURE THAT INDEPENDENT NONGOVERNMENTAL CONTRACTORS PROVIDE TECHNICAL ASSISTANCE IN ACCORDANCE WITH THE TERMS OF THEIR CONTRACTS. THE LOCAL GOVERNMENT MAY REQUIRE A CONTRACTOR'S TECHNICAL ASSISTANCE TO CONFORM TO ALL LAWS AND ORDINANCES APPLICABLE TO THE APPLICATION IN QUESTION.

(II) THE LOCAL GOVERNMENT MAY DEEM SOME OR ALL OF THE CONTRACTOR'S TECHNICAL ASSISTANCE AS UNACCEPTABLE AND MAY REJECT, REQUIRE CORRECTION OF, OR DENY APPROVAL FOR SUCH ASSISTANCE.

(8) (a) ANY FACILITY OWNER WHOSE RENEWABLE ENERGY PROJECT IS APPROVED PURSUANT TO THIS SECTION SHALL PAY A SUCCESS FEE IN AN AMOUNT SET BY THE LOCAL GOVERNMENT UPON FINAL APPROVAL OF THE PROJECT.

(b) A FACILITY OWNER WHOSE RENEWABLE ENERGY PROJECT IS APPROVED PURSUANT TO A LOCAL GOVERNMENT'S EXPEDITED PERMIT APPLICATION SHALL PAY AN ADDITIONAL SUCCESS FEE, IN AN AMOUNT SET BY THE LOCAL GOVERNMENT, BASED ON THE AMOUNT OF TIME BETWEEN THE LOCAL GOVERNMENT'S RECEIPT OF THE APPLICATION AND ITS ISSUANCE OF FINAL APPROVAL OF THE PROJECT. THE PERCENTAGE OF THE ADDITIONAL SUCCESS FEE TO BE PAID BY THE FACILITY OWNER IS DETERMINED AS FOLLOWS:

(I) IF THE LOCAL GOVERNMENT ISSUES FINAL APPROVAL WITHIN ONE HUNDRED TWENTY DAYS OR FEWER AFTER RECEIPT OF THE APPLICATION, ONE HUNDRED PERCENT OF THE ADDITIONAL SUCCESS FEE;

(II) IF THE LOCAL GOVERNMENT ISSUES FINAL APPROVAL BETWEEN ONE HUNDRED TWENTY-ONE DAYS AND ONE HUNDRED EIGHTY DAYS AFTER RECEIPT OF THE APPLICATION, FIFTY PERCENT OF THE ADDITIONAL SUCCESS FEE;

(III) IF THE LOCAL GOVERNMENT ISSUES FINAL APPROVAL BETWEEN ONE HUNDRED EIGHTY-ONE DAYS AND TWO HUNDRED FORTY DAYS AFTER RECEIPT OF THE APPLICATION, TWENTY-FIVE PERCENT OF THE ADDITIONAL SUCCESS FEE; OR

(IV) IF THE LOCAL GOVERNMENT ISSUES A FINAL DECISION MORE THAN TWO HUNDRED FORTY DAYS AFTER RECEIPT OF THE APPLICATION, THE LOCAL GOVERNMENT SHALL ONLY CHARGE THE SUCCESS FEE FOR A STANDARD PERMIT APPLICATION APPROVAL PURSUANT TO SUBSECTION (8)(a) OF THIS SECTION.

(c) A LOCAL GOVERNMENT SHALL USE THE MONEY COLLECTED FROM THE SUCCESS FEE ONLY FOR FUNDING:

(I) LOCAL GOVERNMENT STAFF RESPONSIBLE FOR PERMITTING AND ENFORCEMENT OF LOCAL RENEWABLE ENERGY LAWS AND ORDINANCES;

(II) INSPECTION AND COMPLIANCE MONITORING IN CONNECTION WITH RENEWABLE ENERGY PROJECTS;

(III) MITIGATION AND REPAIR TO LOCAL ROADS IMPACTED BY HAULING OF HEAVY MACHINERY FOR RENEWABLE ENERGY PROJECTS;

(IV) EMERGENCY MANAGEMENT AND FIRE READINESS RELATED TO THE RENEWABLE ENERGY FACILITY; AND

(V) OVERSIGHT OF ANY DECOMMISSIONING OF A RENEWABLE ENERGY FACILITY.

SECTION 2. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.