By Jen Schumann | Rocky Mountain Voice
Colorado’s climate fee law, SB24-230, is now at the center of a constitutional fight, but the lawmakers and advocacy groups that once championed its goals have offered no explanation as the legal questions mount. SB24-230 took effect in July and is expected to pull in more than $175 million next year from oil and gas producers.
Lawmakers insist those charges are “remediation fees,” meant to cover environmental damage they say comes from drilling.
Advance Colorado views the structure differently. Executive Vice President Kristi Burton Brown stated, “That’s not the standard. A real ‘fee’ has to fund a service being received by the person paying. ‘Fees’ are not designed to be penalties for industries the state doesn’t favor, and no court has defined them that way. Additionally, the ‘fee’ charged here is much broader than ‘remediation services.’ Being charged for transit that nobody rides is not a ‘fee’ that the oil and gas industry is constitutionally responsible for.”
As money has begun flowing into transit, rail and wildlife programs, the unresolved question is whether SB24-230 fits within the limits Colorado voters set when they passed TABOR and Proposition 117.
How the lawsuit frames the issue
Advance Colorado’s lawsuit argues SB24-230 is a tax in everything but name and that the General Assembly violated Proposition 117 by using an enterprise structure to route new revenue through the Clean Transit Enterprise and Colorado Parks and Wildlife, even though expected revenue exceeds the $100 million limit.
Burton Brown agrees that SB24-230 is “the most egregious fee we have seen in Colorado” because “the fee is totally unrelated to any service being provided to the people responsible for paying.”
Those claims move from theory to evidence once the fiscal documents are examined, which outline how revenue from SB24-230 will be collected and distributed.
What the fiscal documents show
According to the fiscal note, the law is expected to generate $109.4 million in its first year of collection and $175.3 million in its second. Most of the revenue is exempt from TABOR because it flows through the Clean Transit Enterprise and Colorado Parks and Wildlife.
The same fiscal note requires the Clean Transit Enterprise to reduce fees during the first year so total revenue stays under the $100 million cap for new enterprises imposed by Proposition 117.
Burton Brown said this record shows legislative intent. She said lawmakers “tried to avoid the provision of Prop 117 that requires them to seek voter approval when an enterprise brings in $100M or more in the first five years. They purposely avoided bringing this ‘fee’ to voters.”
Fiscal note projects SB24-230 revenue at $109.4 million in 2025–26 and $175.3 million in 2026–27.
What the law actually funds
SB24-230’s scope extends well beyond narrow remediation. Seventy percent of Clean Transit revenue flows into a statewide operations fund meant to expand transit service and increase frequency. Ten percent goes to grants for local and regional transit providers. The remaining 20 percent supports rail projects, including renewed emphasis on the northwest rail line to Longmont.
Colorado Parks and Wildlife receives more than $50 million a year for what the fiscal note describes as “broad investments in land, wildlife and habitat conservation restoration.”
SB24-230 allocates Clean Transit revenue with 70 percent for operations, 10 percent for grants and 20 percent for rail.
Environmental groups championed the bill, then declined to respond
Sierra Club Colorado, Western Resource Advocates and the Southwest Energy Efficiency Project (SWEEP) celebrated the passage of SB24-230.
During regulatory proceedings this year, Sierra Club said Colorado is committing to “some of the strongest gas utility decarbonization goals in the nation.”
Sierra Club praised Colorado for adopting what it called some of the strongest gas utility decarbonization goals in the nation.
Western Resource Advocates described the remediation fees as a way to “partially mitigate oil and gas production’s harms and allow the state to conserve and protect more important natural habitat and wildlife.” They noted that “the funds may be used to support CPW’s work, including creating new state parks and state wildlife areas” among a list of conservation options.
SWEEP called SB24-230 a new and much-needed funding source for transit operations.
SWEEP called the law “a new funding source for transit operations” and a major step in Colorado’s transportation transformation. They also warn that Colorado risks “falling even further into the trap of car dependence” unless the state adopts far stronger measures to reduce driving.
SWEEP took a victory lap after the 2024 legislative session, calling it a “win for the climate,” and said, “One of the biggest victories of the session was achieving a broad agreement between conservation groups, Governor Polis, the oil and gas industry, and legislative leaders to pull down a set of damaging industry-supported ballot initiatives… and to support legislation to reduce ozone pollution and generate new funding for transit operations, rail service, and land protection and remediation.”
Taken together, these statements show how supporters viewed the law as a way to speed up decarbonization and grow transit without going back to voters for a tax increase.
Scientific context shows a different environmental narrative
In November, NOAA and NASA reported that the Antarctic ozone hole was the fifth smallest since 1992. “We are seeing ozone holes trending smaller in area than they were in the early 2000s,” scientist Paul Newman said.
Much of the ozone layer’s recovery can be traced to the Montreal Protocol. Signed in 1987, it phased out 98 percent of the chemicals that once carved out the Antarctic ozone hole. As those chemicals disappeared, the layer began to stabilize and the yearly hole started to contract, something NOAA and NASA noted last month.
It’s a concrete success story for targeted regulation and a reminder that scientific findings often look very different from the political arguments used to justify fee authority.
The ozone hole is fifth smallest since 1992.
Those who backed SB24-230 have stayed silent
Ahead of publication, RMV asked House Speaker Julie McCluskie, Sen. Lisa Cutter and Rep. Elizabeth Velasco to explain how SB24-230 meets constitutional requirements and why no ballot referral was considered. None responded. Sierra Club Colorado, Western Resource Advocates and SWEEP also did not respond to questions.
These organizations and lawmakers played central roles in shaping SB24-230, previously praised it as a climate milestone and continue to champion extreme environmental policy initiatives.
Burton Brown said the constitutional issue is straightforward. “Whenever the state passes laws creating enterprises, charging fees, or trying to raise taxes, they are subject to TABOR, Prop 117, and the single subject provision in the state constitution.”
How the court fight could reshape fee law
The court will determine whether SB24-230’s production charges qualify as fees tied to environmental remediation or taxes requiring prior voter approval.
If the court pauses the law during the case, transit agencies and Colorado Parks and Wildlife could lose access to revenue they have already begun incorporating into long-term planning.
Burton Brown said the question is not complicated. “This should have gone to voters as a tax because the charges in SB24-230 are properly classified as a tax. The point of this lawsuit is that voters should have a choice, rather than us predicting what their choice would be. Clearly the legislature didn’t think voters would approve the fees, or they wouldn’t continue to do end runs around TABOR and Prop 117.”
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