DENVER — A bill making its way through the Colorado legislature will increase requirements to obtain a driver’s license for new drivers under 21 — both educationally and financially, while some supporters of the bill stand to make millions in additional revenue at the expense of taxpayers if passed.
Senate Bill 23-011 — Minor Driver’s Education Requirements — is sponsored by Sen. Faith Winter, D-Westminster and Representatives Andrew Boesenecker, D-Fort Collins and Mandy Lindsay, D-Aurora in the House.
The bill will require anyone under 18 to take a state-approved, 30-hour driver education course and receive at least 6 hours of behind-the-wheel training with a driving instructor. Those between 18-21 — unless they have been issued a license in another state previously — will be required to take a four-hour prequalification driver awareness program, approved by the state.
Currently, for drivers between 16 years and 16 years and six months, Colorado requires a valid driver’s permit for at least one year, 50 hours of driving time with at least 10 of those at night, and the successful completion of training with a licensed driver’s education company.
Between 16 years and six months and 18, Colorado requires a valid driver’s permit for at least one year and 50 hours of driving time with at least 10 of those at night. From 18 to 21, Colorado requires a valid permit and passing score on a driving test.
However, the behind-the-wheel time now can be supervised by a parent, guardian, or other responsible adult. Under the new bill, behind-the-wheel training will be required to come from a licensed instructor.
TABOR refund implications
The state will offer a refundable tax credit up to $500 to the minor or his or her guardian to cover the cost of the training, so long as the person filing for the credit does not earn more than $75,000 per year in income. Drafters originally had a tax credit of up to $1,000 but it was amended in committee. It was also amended so that the credit can be increased by $100 when inflation has caused the cost of instruction to increase by $100 or more.
Also amended was the effective date of the bill, which was originally set to become effective this year. It will now become effective July 1, 2024.
The bill passed out of the Senate transportation & energy committee on Jan 23 along party lines, and then Senate finance committee on Feb. 2 with two amendments along party lines. It now goes to appropriations.
According to the fiscal note, the bill is expected to cost taxpayers $57 million over its first two years, as it will reduce the amount of revenue subject to refunds under the Taxpayer’s Bill of Rights (TABOR).
TABOR is a constitutional amendment that, among other things, regulates the growth of government spending to a reasonable annual rate. Excess revenue must be returned to taxpayers unless voters give permission to exceed those limits.
Historically, TABOR refunds are given based on the amount of taxes paid into the state. The more taxes paid, the bigger the refund. Last year, Gov. Jared Polis marketed the constitutionally mandated refunds as a $750 gift to every Coloradan who filed an income tax return.
Bill supporters benefit financially
The tax credits are not the only issue with the bill. Although the four-hour licensed instructor requirement will inject millions of new revenue into many certified instruction schools across the state using taxpayer money, former Republican State Rep. Dave Williams pointed out in an interview with Brandon Wark at FreeStateColorado.com that this bill very narrowly benefits AAA Colorado, which stands to make millions if this passes.
Williams said AAA is currently supporting the bill as the only company in Colorado prepared to offer the 30-hour online course once it becomes effective.
“AAA is pushing it because they have a driver’s ed course that matches the requirements of the bill,” Williams said. “They are doing it because they know that through government force, they can create a market that they will have a monopoly over. They can force people to adhere to requirements that their program is already offering. Any other competitors are going to be hosed because they weren’t first to market.”
Complete Colorado verified with the Secretary of State’s Office that AAA Colorado is supporting the bill, and Complete Colorado could not find another company in Colorado that currently has the 30-hour program ready to roll out like AAA.
AAA currently offers the class at a rate of $99 for non-members and $89 for members. According to the Colorado Department of Revenue 2022 Annual Report, Colorado issued 83,515 minor licenses in 2022. If AAA were to capture just one-quarter of new license holders, the company stands to gain at least an additional $2 million a year in added revenue off Colorado taxpayers. If no other company is up and ready to go, AAA is looking at added revenue reaching nearly $8 million a year.
Williams said the implications of this bill are even further reaching, such as the upfront costs that won’t be reimbursed through the tax credits for possibly a year or more to get a license.
“If you are poor, or you are under-employed or you are struggling to make ends meet, you are not going to be able to afford to actually get a license,” Williams said. “And if you can’t drive that’s going to make it very hard to get a job.”
The bill does not have a safety clause on it, meaning if it passes, any Colorado resident could challenge the bill and force it to go to the voters, so long as a petition is filed within 90 days after the final day of the 2023 legislative session. Those wishing to repeal the bill would need to gather 124,238 signatures from registered voters in 60 days to force it to a vote. It would appear on the 2024 ballot.
