1. (1) Legislative declaration. (a) The general assembly finds that:

   1. (I) Geologic storage operations are an important tool to help the state meet its greenhouse gas emission reduction goals;
   2. (II) Geologic storage operations involve permanently storing injection carbon dioxide underground;
   3. (III) It is prudent to monitor and otherwise conduct long-term stewardship of injection carbon dioxide to demonstrate that the injection carbon dioxide is stable and will not pose a risk to underground sources of drinking water;
   4. (IV) Geologic storage operations present the state with risks of orphaned geologic storage facilities;
   5. (V) It is necessary, appropriate, and in the best interest of geologic storage operators for the state to conduct long-term stewardship; and
   6. (VI) It is necessary, appropriate, and in the best interest of geologic storage operators for the state to ensure that orphaned geologic storage facilities are plugged, abandoned, reclaimed, and remediated, if necessary, in a timely manner if available financial assurance is insufficient.

   7. (b) The general assembly also finds that:

      1. (I) Current law in January 2025 provides no mechanism to pay for the state's long-term stewardship of geologic storage facilities; and
      2. (II) Current law in January 2025 authorizes the commission to require geologic storage operators to maintain and demonstrate certain financial assurances to plug, abandon, reclaim, and remediate geologic storage facilities.

   8. (c) Now, therefore, the general assembly declares that:

      1. (I) It is in the public interest to create an enterprise within the department that is committed to funding long-term stewardship of injection carbon dioxide and, if necessary, the plugging, abandonment, reclaiming, and remediating of orphaned geologic storage facilities;
      2. (II) The activities of the enterprise shall be funded by revenue generated from stewardship fees paid by operators of class VI injection wells in Colorado;
      3. (III) It is appropriate that geologic storage operators should pay such stewardship fees, as geologic storage operators are the direct beneficiaries of the services provided by the enterprise, which are long-term stewardship and, where necessary, the plugging, abandonment, reclaiming, and remediating of orphaned geologic storage facilities;
      4. (IV) Geologic storage operators benefit from long-term stewardship because services, such as long-term monitoring and site management, allow geologic storage operators to operate class VI injection wells in Colorado by addressing the risks presented by the permanent storage of injection carbon dioxide without requiring geologic storage operators to conduct long-term stewardship;

      5. (V) 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, the general assembly concludes that the stewardship fee is a fee, not a tax, and the enterprise operates as a business because the stewardship fee is imposed for the following specific business purposes:

         1. (A) The long-term stewardship services authorized by this section provide a benefit to geologic storage operators by allowing a geologic storage operator to be released of regulatory and long-term stewardship responsibilities associated with injection carbon dioxide after the commission approves site closure of a geologic storage facility; and
         2. (B) The plugging, abandonment, reclaiming, and remediating services authorized by this section provide a benefit to geologic storage operators by allowing them to operate class VI injection wells in Colorado despite the risk that available financial assurance may be insufficient to protect the public from the costs of geologic storage facilities being orphaned; and
      6. (VI) So long as the enterprise qualifies as an enterprise for purposes of section 20 of article X of the state constitution, the revenue from the stewardship fee administered by the enterprise and collected by the commission 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)(G).

2. (2) Definitions. As used in this section, unless the context otherwise requires:

   1. (a) Department means the department of natural resources.
   2. (b) Enterprise means the geologic storage stewardship enterprise created in subsection (3) of this section.
   3. (c) Enterprise board means the geologic storage stewardship enterprise board created in subsection (4) of this section.
   4. (d) Geologic storage stewardship enterprise cash fund means the geologic storage stewardship enterprise cash fund created in subsection (7) of this section.
   5. (e) Long-term stewardship means monitoring and integrity maintenance of geologic storage facilities after the commission approves a site closure, as well as any associated action necessary to protect public health, safety, welfare, the environment, or wildlife resources.
   6. (f) Orphaned geologic storage facility means a geologic storage facility in the state for which no owner or operator can be found or for which the owner or operator is unwilling or unable to pay the costs of plugging, abandoning, remediating, reclaiming, or other action necessary to obtain site closure pursuant to commission rules.
   7. (g) Stewardship fee means the stewardship fee authorized and imposed pursuant to subsection (6) of this section.

3. (3) Enterprise created. (a) The geologic storage stewardship enterprise is created in the department, 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. The enterprise is created for the purpose of:

   1. (I) Determining the amount of stewardship fees;
   2. (II) Funding the long-term stewardship of geologic storage facilities in the state;
   3. (III) Funding the plugging, abandonment, reclaiming, and, as necessary, remediating of orphaned geologic storage facilities in the state if the commission, after notice and a hearing, determines that available financial assurance is insufficient; and
   4. (IV) Ensuring that costs associated with long-term stewardship of geologic storage facilities are borne by geologic storage operators in the form of stewardship fees.
   5. (b) The enterprise board, in consultation with the commission, shall administer the enterprise in accordance with this section.

   6. (c)

      1. (I) 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, as defined in section 24-77-102 (7), from all Colorado state and local governments combined. So long as it constitutes an enterprise, the enterprise is not subject to section 20 of article X of the state constitution.
      2. (II) The enterprise is authorized to issue revenue bonds for the expenses of the enterprise, secured by revenue of the enterprise.

4. (4) Enterprise board created - membership - duties - repeal. (a) (I) The geologic storage stewardship enterprise board is created to administer the enterprise. The enterprise board includes the following five members:

   1. (A) The chair of the commission;
   2. (B) The director of the commission or the director's designee;
   3. (C) An individual with substantial experience in geologic storage, preferably with an actuarial science background as related to evaluating the long-term risk of geologic storage facilities, to be appointed by the governor and confirmed by the senate;
   4. (D) An individual with formal training or substantial experience in environmental protection, public health, or other relevant fields, to be appointed by the governor and confirmed by the senate; and
   5. (E) An individual with formal training or substantial experience in wellbore monitoring, long-term stewardship, or other relevant technical fields, to be appointed by the governor and confirmed by the senate.

   6. (II)

      1. (A) The governor shall appoint the initial members of the enterprise board pursuant to subsections (4)(a)(I)(C), (4)(a)(I)(D), and (4)(a)(I)(E) of this section on or before September 1, 2025.
      2. (B) This subsection (4)(a)(II) is repealed, effective July 1, 2026.
   7. (III) The members of the enterprise board described in subsections (4)(a)(I)(C), (4)(a)(I)(D), and (4)(a)(I)(E) of this section shall each serve terms of three years; except that the initial term of the member appointed pursuant to subsection (4)(a)(I)(C) of this section is one year, and the initial term of the member appointed pursuant to subsection (4)(a)(I)(D) of this section is two years. In the event of a vacancy, the governor may appoint an individual to complete the term of the member whose seat has become vacant.
   8. (IV) An individual may be appointed to serve as a member of the enterprise board pursuant to subsection (4)(a)(I)(C), (4)(a)(I)(D), or (4)(a)(I)(E) of this section for an unlimited number of terms.
   9. (V) Enterprise board members serving pursuant to subsections (4)(a)(I)(C), (4)(a)(I)(D), and (4)(a)(I)(E) of this section may receive compensation from the enterprise on a per diem basis for reasonable expenses actually incurred in the performance of duties required of enterprise board members under this section.
   10. (VI) The governor shall select a member of the enterprise board to serve as chair of the enterprise board.

   11. (b) In addition to administering the enterprise, the enterprise board shall:

       1. (I) Set the amount of the stewardship fee at an amount that is reasonably related to the overall cost of the long-term stewardship services provided by the enterprise. The enterprise board shall set the initial amount within six months after the enterprise board is confirmed.

       2. (II) As frequently as the enterprise board determines necessary, consider whether the amount of the stewardship fee should be increased or reduced, based on:

          1. (A) The overall cost of the enterprise's long-term stewardship services, including reasonably anticipated future expenditures from the geologic storage stewardship enterprise cash fund; and
          2. (B) The need to comply with subsection (7)(b) of this section;
       3. (III) Consider the importance of financial predictability for operators when determining the frequency of changes to the stewardship fee amount;
       4. (IV) If the enterprise board determines that an increase or reduction of the stewardship fee amount is warranted, adjust the stewardship fee amount to an amount that is reasonably related to the overall cost of the long-term stewardship services provided by the enterprise; and
       5. (V) Advise the commission of the outcome of the enterprise board's deliberations pursuant to this subsection (4).

5. (5) Powers and duties. In addition to any other powers and duties specified in this section, the enterprise board has the following general powers and duties on behalf of the enterprise:

   1. (a) To adopt procedures for conducting the enterprise board's affairs;
   2. (b) To acquire, hold title to, and dispose of real and personal property, including ownership of injection carbon dioxide upon approval of site closure of an associated geologic storage facility by the commission;
   3. (c) To employ and supervise individuals, professional consultants, and contractors as are necessary in the enterprise board's judgment to carry out its business purposes;
   4. (d) To engage the services of contractors, consultants, 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. The enterprise may contract with the department for the provision of office space and administrative staff to the enterprise at a fair market rate.
   5. (e) To seek, accept, and expend gifts, grants, donations, or other payments from private or public sources for the purposes of this section, so long as the total amount of all grants from Colorado state and local governments received in any state fiscal year is less than ten percent of the enterprise's total annual revenue for the state fiscal year. All money received as gifts, grants, and donations shall be credited to the geologic storage stewardship enterprise cash fund.

   6. (f) To create and impose upon geologic storage operators an additional fee to address the plugging, abandoning, reclaiming, and remediating of orphaned geologic storage facilities, which fee is in an amount that is reasonably related to the overall cost of plugging, abandoning, reclaiming, and remediating orphaned geologic storage facilities, so long as the enterprise board finds that:

      1. (I) Geologic storage operations in the state are likely to create orphaned geologic storage facilities in the future;
      2. (II) Financial assurance provided by operators will be insufficient to address orphaned geologic storage facilities; and
      3. (III) Stewardship fees deposited into the geologic storage stewardship enterprise cash fund will be insufficient to address both long-term stewardship and orphaned geologic storage facilities;
   7. (g) To have and exercise all rights and powers necessary or incidental to or implied from the specific powers and duties granted by this section; and
   8. (h) To perform all acts necessary to accomplish site closures pursuant to commission rules for orphaned geologic storage facilities.
6. (6) Stewardship fees - rules. (a) On or before April 30, 2026, and on or before April 30 each year thereafter, each geologic storage operator shall pay a stewardship fee to the commission, which shall collect the stewardship fee on the enterprise's behalf, for each ton of injection carbon dioxide that the geologic storage operator injects in the state.
7. (b) Money collected as stewardship fees shall be credited to the geologic storage stewardship enterprise cash fund.

8. (c) The money collected by the commission for transfer to the geologic storage stewardship enterprise cash fund pursuant to subsection (6)(b) of this section is:

   1. (I) Collected for the enterprise;
   2. (II) Custodial money intended for the enterprise and held temporarily by the commission and the state treasurer solely for the purpose of transferring the money to the geologic storage stewardship enterprise cash fund; and
   3. (III) Based on the enterprise's status as an enterprise, not subject to section 20 of article X of the state constitution at any time during the money's collection, transfer, and use.
9. (d) The commission may adopt rules to implement this subsection (6).

10. (7) Geologic storage stewardship enterprise cash fund - repeal. (a) The geologic storage stewardship enterprise cash fund is created in the state treasury. The geologic storage stewardship enterprise cash fund consists of:

    1. (I) Money received as stewardship fees;
    2. (II) Any money received from the issuance of revenue bonds, as described in subsection (3)(c)(II) of this section;
    3. (III) Any gifts, grants, or donations received pursuant to subsection (5)(e) of this section; and
    4. (IV) Any other money that the general assembly may appropriate or transfer to the geologic storage stewardship enterprise cash fund.

    5. (b)

       1. (I) The total amount of money credited or appropriated to the geologic storage stewardship enterprise cash fund as stewardship fees shall not exceed one hundred million dollars in the first five years of the enterprise's existence.
       2. (II) This subsection (7)(b) is repealed, effective July 1, 2031.
    6. (c) The state treasurer shall credit all interest and income derived from the deposit and investment of money in the geologic storage stewardship enterprise cash fund to the geologic storage stewardship enterprise cash fund. Any unexpended and unencumbered money remaining in the geologic storage stewardship enterprise cash fund at the end of a fiscal year remains in the geologic storage stewardship enterprise cash fund and shall not be credited or transferred to the general fund or to any other fund.

    7. (d) Money credited to the geologic storage stewardship enterprise cash fund is continuously appropriated to the enterprise and shall be expended to pay the costs of:

       1. (I) Long-term stewardship;
       2. (II) Plugging, abandoning, reclaiming, and remediating services for orphaned geologic storage facilities at the request of the director of the commission if the commission, after notice and a hearing, determines that available financial assurance is insufficient; and
       3. (III) The enterprise's reasonable and necessary operating expenses.
11. (8) Rules. The enterprise shall adopt rules as necessary to implement this section. In adopting any rules concerning subsection (6) of this section, the enterprise shall consult with the commission.
12. (9) Governmental immunity. Nothing in this section constitutes a waiver, abrogation, or limitation of governmental immunity, as described in article 10 of title 24. Geologic storage facilities, geologic storage locations, geologic storage resources, injection carbon dioxide, and facilities associated with geologic storage operations are not gas facilities for the purposes of section 24-10-106 (1)(f) and do not constitute any other area or facility for which sovereign immunity is waived pursuant to section 24-10-106 (1).

Source: L. 2025: Entire section added, (HB 25-1165), ch. 257, p. 1291, § 4, effective August 6.

Cross references: For the legislative declaration in HB 25-1165, see section 1 of chapter 257, Session Laws of Colorado 2025.