House Bill 25-1269 Rerevised

A Bill for an Act

• Page 1, Line 101Concerning building decarbonization measures, and, in

• Page 1, Line 102connection therewith, creating a building

• Page 1, Line 103decarbonization enterprise and making an

• Page 1, Line 104appropriation.

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.)

The bill updates energy use benchmarking and performance standard requirements for owners of certain buildings (covered building owners), including:

• A requirement to meet 2040 performance standards, as adopted by the air quality control commission, in consultation with the Colorado energy office (office) and in consideration of recommendations made by a task force convened by the office;
• Authorizing an alternative compliance mechanism for covered building owners to comply with certain performance standards; and
• Aligning civil penalties owed for a violation of the benchmarking and performance standard requirements with civil penalties owed for other air quality violations.

The bill also creates a building decarbonization enterprise (enterprise) to provide financial assistance, technical assistance, and other programmatic assistance to covered building owners to effectively and efficiently implement building decarbonization measures, including energy efficiency measures, electrification measures, energy upgrades, and participation in utility on-bill repayment programs. The enterprise is authorized to impose and collect from covered building owners an annual building decarbonization fee to cover the enterprise's costs in providing the financial, technical, and programmatic assistance.

The bill exempts a local government that adopts building codes from the requirement to adopt an energy code if the local government has adopted an approved wildfire resiliency code.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, 30-28-211, add (3.5)(g) as follows:

• Page 2, Line 330-28-211.  Energy efficient building codes - legislative

• Page 2, Line 4declaration - definitions. (3.5) (g)  Notwithstanding the

• Page 2, Line 5requirements set forth in subsections (3.5)(a) and (3.5)(b) of this

• Page 2, Line 6section, a board of county commissioners is not required to

• Page 2, Line 7adopt and enforce an energy code that meets the requirements

• Page 2, Line 8of subsections (3.5)(a) and (3.5)(b) of this section solely as a result of adopting the wildfire resiliency code.

• Page 2, Line 9SECTION 2.  In Colorado Revised Statutes, 31-15-602, add

• Page 2, Line 10(3.5)(f) as follows:

• Page 3, Line 131-15-602.  Energy efficient building codes - legislative

• Page 3, Line 2declaration - definitions - repeal. (3.5) (f)  Notwithstanding the

• Page 3, Line 3requirements set forth in subsections (3.5)(a) and (3.5)(b) of this

• Page 3, Line 4section, a governing body of a municipality is not required to

• Page 3, Line 5adopt and enforce an energy code that meets the requirements

• Page 3, Line 6of subsections (3.5)(a) and (3.5)(b) of this section solely as a result of adopting the wildfire resiliency code.

• Page 3, Line 7SECTION 3.  In Colorado Revised Statutes, 25-7-142, amend

• Page 3, Line 8(2)(s), (3), (8)(c)(III), and (8)(f); and add (1.5), (2)(q.5), (8.5),(8.6), (8.7), and (8.8) as follows:

• Page 3, Line 925-7-142.  Energy benchmarking - data collection and access

• Page 3, Line 10- utility requirements - task force - rules - reports - definitions -

• Page 3, Line 11legislative declaration - repeal. (1.5)  The general assembly further finds and declares that:

• Page 3, Line 12(a)  Energy consumption by Colorado's built environment,

• Page 3, Line 13including large commercial and residential properties, is a significant contributor to statewide greenhouse gas pollution;

• Page 3, Line 14(b)  Reducing the greenhouse gas emissions arising from

• Page 3, Line 15energy consumption by the built environment is necessary to

• Page 3, Line 16achieve the 2050 net-zero greenhouse gas emission reduction goal set forth in section 25-7-102 (2)(g);

• Page 3, Line 17(c)  The commission satisfied the objectives set forth in

• Page 3, Line 18subsections (8)(a)(II) and (8)(c)(II) of this section by adopting

• Page 3, Line 19benchmarking and performance standard rules in August 2023; and

• Page 3, Line 20(d)  In implementing the requirements of this section and

• Page 3, Line 21the commission's rules adopted pursuant to this section, the

• Page 4, Line 1division should, consistent with section 25-7-122 (2), consider an

• Page 4, Line 2owner's effort to comply with building performance standards

• Page 4, Line 3when implementing enforcement and assessing penalties pursuant to section 25-7-122 and this section.

• Page 4, Line 4(2)  Definitions. As used in this section, unless the context otherwise requires:

• Page 4, Line 5(q.5)  "Operator" means an owner, tenant, or other individual or entity:

• Page 4, Line 6(I)  Occupying or named on the utility bill for a covered building; and

• Page 4, Line 7(II)  That has access to utility data for the covered building.

• Page 4, Line 8(s)  "Performance standards" means standards that the commission

• Page 4, Line 9establishes by rule pursuant to subsection (8)(c) subsection (8)(c) or

• Page 4, Line 10(8.5)(a) of this section and with which owners of covered buildings are required to comply.

• Page 4, Line 11(3)  Benchmarking requirements on owners and operators.

• Page 4, Line 12(a)  On or before December 1, 2022, and on or before June 1 of each

• Page 4, Line 13subsequent year Notwithstanding the rules that the commission

• Page 4, Line 14adopted before July 2025, beginning in 2026 for 2025

• Page 4, Line 15benchmarking data and for each subsequent year, the owner of a

• Page 4, Line 16covered building shall submit a report of the benchmarking data for the previous calendar year to the office on or before November 1.

• Page 4, Line 17(b)  Notwithstanding subsection (3)(a) of this section,

• Page 4, Line 18beginning in 2025 for 2024 benchmarking data and for each

• Page 4, Line 19subsequent year, if an owner of a covered building demonstrates

• Page 4, Line 20to the office that it lacks access to benchmarking data, the

• Page 5, Line 1operator of the covered building shall, on or before November

• Page 5, Line 21 of each year, submit to the office a report of the benchmarking data for the covered building for the previous calendar year.

• Page 5, Line 3(b)  (c)  Before providing a benchmarking report pursuant to

• Page 5, Line 4subsection (3)(a) of this section, an owner of a covered building or

• Page 5, Line 5operator shall run any automated data checking function of the benchmarking tool and correct any errors discovered.

• Page 5, Line 6(c)  (d)  The following owners and operators may comply with this subsection (3) collectively at the campus-wide level:

• Page 5, Line 7(I)  The owner or operator of multiple covered buildings that are part of a master metered group of buildings without submetering;

• Page 5, Line 8(II)  The owner or operator of a correctional facility; and

• Page 5, Line 9(III)  The owner or operator of a public building that is a covered building.

• Page 5, Line 10(8)  Task force recommendations for implementation - rules -

• Page 5, Line 11repeal. (c) (III)  The commission shall not adopt rules to rescind or

• Page 5, Line 12modify the exemptions for owners of public buildings from payment of

• Page 5, Line 13the annual fee, as set forth in section 24-38.5-112 (1)(e)(II); from

• Page 5, Line 14payment of the building decarbonization fee, as set forth in

• Page 5, Line 15section 24-38.5-123 (5)(b); or from payment of civil penalties, as set forthin section 25-7-122 (1)(i).

• Page 5, Line 16(f)  Subsections (8)(a), (8)(b), (8)(c)(I), (8)(c)(II), (8)(d), and

• Page 5, Line 17(8)(e) of this section and this subsection (8)(f) are repealed, effective July 1, 2025.

• Page 5, Line 18(8.5)  2040 performance standard targets - division to propose

• Page 5, Line 19standards - commission to adopt rules - task force - membership -

• Page 5, Line 20repeal. (a) (I)  To help achieve or exceed greenhouse gas emission

• Page 6, Line 1reduction targets pursuant to subsection (8)(c)(IV) of this

• Page 6, Line 2section, the commission shall adopt, by rule, 2040performance standards in accordance with section 25-7-102 (2)(g).

• Page 6, Line 3(II)  On or before June 1, 2029, the division, after

• Page 6, Line 4consultation with the office, shall consider recommendations

• Page 6, Line 5from the task force created pursuant to subsection(8.5)(c)of

• Page 6, Line 6this section and shall propose 2040 performance standards to

• Page 6, Line 7the commission for consideration in the rules adopted pursuant to subsection (8.5)(a)(I) of this section.

• Page 6, Line 8(b)  The division, in proposing 2040 performance standards,

• Page 6, Line 9and the commission, in adopting 2040 performance standards,

• Page 6, Line 10shall consider whether targets that are included in the 2040

• Page 6, Line 11performance standards to reduce emissions from covered

• Page 6, Line 12buildings are consistent with meeting the economy-wide emission

• Page 6, Line 13reduction goals set forth in section25-7-102 (2)(g), taking into consideration:

• Page 6, Line 14(I)  The capital planning periods for covered buildings;

• Page 6, Line 15(II)  The feasibility of an owner planning and implementing

• Page 6, Line 16a building upgrade project ahead of the compliance date for the

• Page 6, Line 172040 performance standard that the commission sets by rule pursuant to subsection (8.5)(a)(I) of this section; and

• Page 6, Line 18(III)  That all rules that the commission adopts must be

• Page 6, Line 19technologically feasible and economically reasonable pursuant to the requirements set forth in section 25-7-102 (1).

• Page 6, Line 20(c) (I)  On or before July 1, 2027, the director of the office

• Page 6, Line 21shall appoint and convene a task force. The task force shall

• Page 6, Line 22review the benchmarking data submitted for calendar years

• Page 7, Line 12021 through 2026 and, on or before July 1, 2028, develop and

• Page 7, Line 2provide recommendations to the division regarding the 2040 performance standards.

• Page 7, Line 3(II)  As part of the recommendations developed pursuant

• Page 7, Line 4to subsection (8.5)(c)(I) of this section, the task force shall consider:

• Page 7, Line 5(A)  The economy-wide emission reduction goals set forth in section 25-7-102 (2)(g);

• Page 7, Line 6(B)  The capital planning periods for covered buildings and

• Page 7, Line 7the feasibility of an owner planning and implementing a building upgrade project ahead of the compliance date;

• Page 7, Line 8(C)  Whether the building performance program should

• Page 7, Line 9allow a covered building owner to meet performance targets

• Page 7, Line 10through the implementation of energy efficiency improvements or other eligible measures;

• Page 7, Line 11(D)  Improvements that materially advance compliance

• Page 7, Line 12with the performance standard and avoid premature

• Page 7, Line 13replacement of equipment that remains within its useful service life;

• Page 7, Line 14(E)  The establishment of individualized compliance

• Page 7, Line 15pathways, including the ability of the office to enter into

• Page 7, Line 16agreements with covered building owners to define alternative

• Page 7, Line 17compliance metrics and schedules that are consistent with

• Page 7, Line 18operational necessity and that avoid unnecessary financial burdens; and

• Page 7, Line 19(F)  Elements from prior rules regarding building

• Page 7, Line 20performance standards, which rules may require revision. The

• Page 8, Line 1task force shall make recommendations regarding any rule revisions that it believes are necessary.

• Page 8, Line 2(d)  The task force consists of the following members, all

• Page 8, Line 3of whom, except the representatives of the office, the public utilities commission, and the division, are voting members:

• Page 8, Line 4(I)  The director of the office or the director's designee;(II)  The director of the division or the director's designee;

• Page 8, Line 5(III)  The director of the public utilities commission or the director's designee;

• Page 8, Line 6(IV)  One member who is an owner of commercial covered

• Page 8, Line 7buildings or who represents owners of commercial covered buildings;

• Page 8, Line 8(V)  One member who is an owner of a multifamily

• Page 8, Line 9residential covered building or who represents owners of multifamily residential covered buildings;

• Page 8, Line 10(VI)  One member who represents an affordable housing organization;

• Page 8, Line 11(VII)  One member who has direct experience in, or is a

• Page 8, Line 12member of an organization representing workers in, mechanical,

• Page 8, Line 13HVAC, or electrical work at the commercial or multifamily building level;

• Page 8, Line 14(VIII)  One member who represents architects;

• Page 8, Line 15(IX)  One member who represents professional engineers and who has experience working on systems for buildings;

• Page 8, Line 16(X)  One member who has extensive experience as a building operating engineer;

• Page 8, Line 17(XI)  One member who represents an electric utility, a gas utility, or a combined electric and gas utility;

• Page 9, Line 1(XII)  One member who is from an environmental

• Page 9, Line 2conservation or environmental justice group with experience in energy efficiency or the built environment;

• Page 9, Line 3(XIII)  One member who is from a local government that

• Page 9, Line 4has enacted or adopted a benchmarking or building energy performance ordinance or resolution;

• Page 9, Line 5(XIV)  Three members who have relevant building

• Page 9, Line 6performance expertise, as determined by the director of the office;

• Page 9, Line 7(XV)  One member representing hospitals or other health-care facilities; and

• Page 9, Line 8(XVI)  One member who is a representative of a mixed-use commercial office.

• Page 9, Line 9(e)  An individual applying to serve on the task force must

• Page 9, Line 10submit a recommendation from a member of the group that the

• Page 9, Line 11individual seeks to represent on the task force or, if a trade

• Page 9, Line 12organization exists that represents the group, a recommendation from the trade organization.

• Page 9, Line 13(f)  In making appointments to the task force, the director

• Page 9, Line 14of the office shall strive to ensure varied geographic representation.

• Page 9, Line 15(g)  The task force shall conduct a comprehensive

• Page 9, Line 16economic analysis of its recommendations for the 2040

• Page 9, Line 17performance standards prior to providing the recommendations to the division.

• Page 9, Line 18(8.6)  Notwithstanding any rules that the commission adopts pursuant to this section before July 1, 2025:

• Page 10, Line 2(a) (I)  An owner of a covered building that meets its

• Page 10, Line 3performance standards using the standard percentage

• Page 10, Line 4reduction building performance pathway, as established by rule

• Page 10, Line 5of the commission, may use 2019 benchmarking data as an

• Page 10, Line 6alternate baseline if the owner submits complete and accurate

• Page 10, Line 72019 benchmarking data to the office no later than November 1, 2027; and

• Page 10, Line 8(II)  An owner of a covered building located within the

• Page 10, Line 9jurisdiction of a local government that has adopted and

• Page 10, Line 10implemented a building performance standards program or

• Page 10, Line 11other similar program intended to reduce greenhouse gas

• Page 10, Line 12emissions from covered buildings is deemed in compliance with

• Page 10, Line 13this section and rules adopted by the commission pursuant to

• Page 10, Line 14this section by complying with the requirements of the local program if:

• Page 10, Line 15(A)  The owner of the covered building maintains

• Page 10, Line 16compliance with the local program and certifies its affirmative

• Page 10, Line 17compliance status by submitting an affidavit, which affidavit

• Page 10, Line 18attests that the covered building meets the requirements of the

• Page 10, Line 19local program, in annual benchmarking reports submitted to the office;and

• Page 10, Line 20(B)  The office has determined that the greenhouse gas

• Page 10, Line 21emission reductions from covered buildings complying with the

• Page 10, Line 22local program are reasonably similar to the greenhouse gas

• Page 10, Line 23emission reductions that would have been achieved through

• Page 11, Line 1compliance with performance standards established under this section;

• Page 11, Line 2(III)  A local jurisdiction that has adopted and

• Page 11, Line 3implemented a building performance standards program may

• Page 11, Line 4issue a certification or report to the office confirming which covered buildings are in compliance with the program; and

• Page 11, Line 5(IV)  Decisions made by the office regarding equivalence

• Page 11, Line 6pursuant to subsection (8.6)(a)(II)(B) of this section are subject to judicial review pursuant to section 24-4-106.

• Page 11, Line 7(b) (I)  Notwithstanding subsection (8.6)(a) of this section

• Page 11, Line 8and any rules adopted by the commission before July 1, 2025, an

• Page 11, Line 9owner may either comply with the 2026 performance standards

• Page 11, Line 10or track its progress toward compliance by submitting

• Page 11, Line 11benchmarking reports in accordance with subsections (3) and(8.6)(b)(II) of this section.

• Page 11, Line 12(II)  Beginning with the 2025 benchmarking reports

• Page 11, Line 13submitted in 2026, and each year thereafter, a covered building

• Page 11, Line 14owner or operator shall, as part of its benchmarking reports submitted to the office:

• Page 11, Line 15(A)  Respond to any standard progress-related questions

• Page 11, Line 16included in the benchmarking form to help assess whether the building is on a path toward future compliance;

• Page 11, Line 17(B)  Indicate whether technical assistance or guidance from the office would be helpful; and

• Page 11, Line 18(C)  Provide any additional nonproprietary information

• Page 11, Line 19requested by the office that is relevant to understanding

• Page 11, Line 20implementation trends or common barriers to compliance.

• Page 12, Line 1(III)  The reports required under subsection (8.6)(b)(II) of

• Page 12, Line 2this section must include only answers to the questions that are

• Page 12, Line 3minimally necessary to assess the covered building owner's progress toward the performance standard targets.

• Page 12, Line 4(IV)  Any rules the commission adopted before July 1, 2025,

• Page 12, Line 5that impose additional compliance obligations upon a covered

• Page 12, Line 6building owner that fails to timely meet a building performance

• Page 12, Line 7standard do not apply until 2031 for the 2030 building performance standards.

• Page 12, Line 8(V)  The office shall prioritize any grant money that is made available for owners of covered buildings:

• Page 12, Line 9(A)  That comply with or establish plans to go beyond the 2026 performance standards; or

• Page 12, Line 10(B)  That comply with the 2030 performance standard

• Page 12, Line 11early or establish plans to go beyond the 2030 performance standards.

• Page 12, Line 12(VI)  Nothing in this subsection (8.6)(b) precludes or

• Page 12, Line 13modifies the division's authority to enforce against an owner of

• Page 12, Line 14a covered building for noncompliance with 2030 performance standards or performance standards set for subsequent years.

• Page 12, Line 15(8.7)  Notwithstanding the requirements of subsection

• Page 12, Line 16(8)(a)(II) of this section or rules adopted pursuant to that

• Page 12, Line 17subsection, subsection (8.6) of this section is necessary for

• Page 12, Line 18covered buildings to effectively implement the performance

• Page 12, Line 19standards. The commission is not required to revise rules that were adopted pursuant to this section before July 1, 2025.

• Page 12, Line 20(8.8) (a)  Energy use that a covered building owner

• Page 13, Line 1demonstrates is attributable to electric vehicle charging shall

• Page 13, Line 2not be included in a covered building's total energy usage for purposes of compliance with building performance standards.

• Page 13, Line 3(b)  A covered building owner may, after consultation with the office, request documentation demonstrating that:

• Page 13, Line 4(I)  The covered building is in current compliance with the commission's rules adopted in accordance with this section; and

• Page 13, Line 5(II)  The covered building is on a path toward meeting

• Page 13, Line 6upcoming compliance obligations, based on the performance

• Page 13, Line 7standards, conditions, and building-specific plans that are in effect at the time of the covered building owner's request.

• Page 13, Line 8(c)  Consistent with rules adopted by the commission, the

• Page 13, Line 9office shall develop guidance concerning individualized target

• Page 13, Line 10and compliance guidelines for covered building owners that

• Page 13, Line 11demonstrate a significant increase in energy use due to the

• Page 13, Line 12expansion of a data center or telecommunications operation. A

• Page 13, Line 13covered building owner's individualized energy efficiency

• Page 13, Line 14target can reflect increased electricity consumption over time

• Page 13, Line 15from a data center or telecommunications operation if all

• Page 13, Line 16cost-effective energy efficiency and electrification measures

• Page 13, Line 17have been performed. Consistent with rules adopted by the

• Page 13, Line 18commission regarding timelines and adjustments for building

• Page 13, Line 19performance standard targets, individualized targets and

• Page 13, Line 20compliance timelines may be adjusted multiple times based on the evolving growth of energy consumption by the covered building.

• Page 13, Line 21SECTION 4.  In Colorado Revised Statutes, add24-38.5-123 as

• Page 13, Line 22follows:

• Page 14, Line 124-38.5-123.   Building decarbonization enterprise - creation

• Page 14, Line 2- membership - powers and duties - building decarbonization

• Page 14, Line 3enterprise cash fund - legislative declaration - definitions - rules -

• Page 14, Line 4report - repeal. (1)  Legislative declaration. (a)  The general assembly finds that:

• Page 14, Line 5(I)  Reducing greenhouse gas emissions from combustion

• Page 14, Line 6devices in residential and commercial buildings is necessary to

• Page 14, Line 7help the state achieve its statewide greenhouse gas emission reduction goals set forth in section 25-7-102 (2)(g);

• Page 14, Line 8(II)  Covered building owners are required to comply with

• Page 14, Line 9benchmarking requirements and performance standard

• Page 14, Line 10requirements and would benefit from additional financial and technical assistance to meet those requirements; and

• Page 14, Line 11(III)  With additional financing and technical assistance,

• Page 14, Line 12covered building owners may more effectively and efficiently

• Page 14, Line 13implement building decarbonization measures, including, but not

• Page 14, Line 14limited to, programs that provide assistance for conducting

• Page 14, Line 15building energy audits, developing analyses to help building

• Page 14, Line 16owners evaluate the best strategies for achieving future

• Page 14, Line 17performance standard targets, employing or consulting with

• Page 14, Line 18building engineers, purchasing energy use tracking software for

• Page 14, Line 19covered building owners to more effectively track energy use, and providing training on such software.

• Page 14, Line 20(b)  Now, therefore, the general assembly declares that:

• Page 14, Line 21(I)  It is in the public interest to create an enterprise

• Page 14, Line 22within the office that is committed to financing and providing

• Page 14, Line 23technical and other support for the implementation of building decarbonization measures;

• Page 15, Line 1(II)  The activities of the enterprise shall be funded by

• Page 15, Line 2revenue generated from a building decarbonization fee paid by

• Page 15, Line 3covered building owners and any gifts, grants, and donations received;

• Page 15, Line 4(III)  It is appropriate that covered building owners should

• Page 15, Line 5pay a building decarbonization fee, as covered building owners

• Page 15, Line 6are the direct beneficiaries of services provided by the

• Page 15, Line 7enterprise, which services include the financing and technical

• Page 15, Line 8assistance provided for the building decarbonization measures described in subsection (1)(a)(III) of this section;

• Page 15, Line 9(IV)  Covered building owners benefit from the

• Page 15, Line 10implementation of building decarbonization measures because

• Page 15, Line 11such measures can reduce covered building owners' long-term costs related to energy use;

• Page 15, Line 12(V)  Consistent with the determination of the Colorado

• Page 15, Line 13supreme court in Nicholl v. E-470 Public Highway Authority, 896

• Page 15, Line 14P.2d 859 (Colo. 1995), that the power to impose taxes is

• Page 15, Line 15inconsistent with enterprise status under section 20 of article

• Page 15, Line 16X of the state constitution, the general assembly concludes

• Page 15, Line 17that the building decarbonization fee is a fee, not a tax, and the

• Page 15, Line 18enterprise operates as a business because the building decarbonization fee is:

• Page 15, Line 19(A)  Imposed for the specific business purposes of providing

• Page 15, Line 20financing and technical assistance to covered building owners

• Page 15, Line 21to more effectively and efficiently implement building

• Page 15, Line 22decarbonization measures, including feasibility analyses and improvements that will reduce energy use and emissions; and

• Page 16, Line 1(B)  Collected at a rate that is reasonably related to the overall cost of the business services being provided; and

• Page 16, Line 2(VI)  So long as the enterprise qualifies as an enterprise

• Page 16, Line 3for purposes of section 20 of article X of the state constitution,

• Page 16, Line 4the revenue from the building decarbonization fee imposed,

• Page 16, Line 5collected, and administered by the enterprise is not state fiscal

• Page 16, Line 6year spending, as defined in section 24-77-102 (17), or state

• Page 16, Line 7revenues, as defined in section 24-77-103.6 (6)(c), and does not

• Page 16, Line 8count against either the state fiscal year spending limit imposed

• Page 16, Line 9by 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).

• Page 16, Line 10(2)  As used in this section, unless the context otherwise requires:

• Page 16, Line 11(a)  "Benchmarking requirements" means the energy

• Page 16, Line 12benchmarking requirements set forth in section 25-7-142 (3) with

• Page 16, Line 13which an owner or operator of a covered building is required to comply.

• Page 16, Line 14(b)  "Board" means the board of directors of the enterprise appointed pursuant to subsection (4)(a) of this section.

• Page 16, Line 15(c)  "Building decarbonization enterprise cash fund" or

• Page 16, Line 16"building decarbonization fund" means the building

• Page 16, Line 17decarbonization enterprise cash fund created in subsection(6)(a) of this section.

• Page 16, Line 18(d)  "Building decarbonization fee" or "fee" means the fee

• Page 16, Line 19paid by the owner of a covered building pursuant to subsection

• Page 16, Line 20(5)(b) of this section.

• Page 17, Line 1(e)  "Covered building" has the meaning set forth in section 25-7-142 (2)(j).

• Page 17, Line 2(f)  "Covered building owner" means an "owner", as defined in section 25-7-142 (2)(r), of a covered building.

• Page 17, Line 3(g)  "Enterprise" means the building decarbonization enterprise created in subsection (3) of this section.

• Page 17, Line 5(h)  "Inflation" means the annual percentage change in the

• Page 17, Line 6in the United States department of labor's bureau of labor

• Page 17, Line 7statistics consumer price index, or a successor index, for

• Page 17, Line 8Denver-Aurora-Lakewood for all items paid for by urban consumers.

• Page 17, Line 9(i)  "Office" means the Colorado energy office created in section 24-38.5-101.

• Page 17, Line 11(j)  "Performance standards" has the meaning set forth in section 25-7-142 (2)(s).

• Page 17, Line 13(3)  Enterprise created - loan from the office - repayment.

• Page 17, Line 14(a)  The building decarbonization enterprise is created in the

• Page 17, Line 15office and exercises its powers and performs its duties and

• Page 17, Line 16functions as a government-owned business in the office to

• Page 17, Line 17execute its business purposes set forth in this subsection (3). The enterprise is created for the purposes of:

• Page 17, Line 18(I)  Imposing and assessing a building decarbonization fee on owners of covered buildings;

• Page 17, Line 19(II)  Providing technical assistance, financing, and other

• Page 18, Line 1programmatic support for covered building owners' building

• Page 18, Line 2decarbonization measures, including, but not limited to,

• Page 18, Line 3conducting building energy audits, developing analyses to help

• Page 18, Line 4building owners evaluate the best strategies for achieving

• Page 18, Line 5future performance standard targets, consulting building

• Page 18, Line 6engineers, purchasing energy use tracking software, and providing training on such software;

• Page 18, Line 7(III)  Having and exercising all rights and powers

• Page 18, Line 8necessary or incidental to or implied from the specific powers and duties granted under this section; and

• Page 18, Line 9(IV)  Ensuring that the building decarbonization fee paid

• Page 18, Line 10by covered building owners is used solely to support programs,

• Page 18, Line 11technical assistance, and financial assistance for the covered building owners that pay the building decarbonization fee.

• Page 18, Line 12(b)  The board, in consultation with the office, shall administer the enterprise in accordance with this section.

• Page 18, Line 13(c) (I)  The enterprise constitutes an enterprise for

• Page 18, Line 14purposes of section 20 of article X of the state constitution so

• Page 18, Line 15long as it retains the authority to issue revenue bonds and

• Page 18, Line 16receives less than ten percent of its total revenues in grants, as

• Page 18, Line 17defined in section 24-77-102 (7), from all Colorado state and

• Page 18, Line 18local governments combined. So long as it constitutes an

• Page 18, Line 19enterprise, the enterprise is not subject to section 20 of article X of the state constitution.

• Page 18, Line 20(II)  The enterprise is authorized to issue revenue bonds for

• Page 18, Line 21the expenses of the enterprise, secured by revenue of the

• Page 18, Line 22enterprise.

• Page 19, Line 1(d) (I)  The office may transfer money from any legally

• Page 19, Line 2available source to the enterprise for the purpose of defraying

• Page 19, Line 3expenses incurred by the enterprise before it receives fee

• Page 19, Line 4revenue. The enterprise may accept and expend any money so

• Page 19, Line 5transferred, and, notwithstanding any state fiscal rule or

• Page 19, Line 6generally accepted accounting principle that could otherwise

• Page 19, Line 7be interpreted to require a contrary conclusion, such a

• Page 19, Line 8transfer is a loan from the office to the enterprise that is

• Page 19, Line 9required to be repaid and is not a grant for purposes of section

• Page 19, Line 1020 (2)(d) of article X of the state constitution or as defined in section 24-77-102 (7).

• Page 19, Line 11(II)  As the enterprise receives sufficient revenue in excess

• Page 19, Line 12of its expenses, the enterprise shall reimburse the office for the

• Page 19, Line 13principal amount of any loan made by the office, plus interest at a rate agreed upon by the office and the enterprise.

• Page 19, Line 14(4)  Enterprise board of directors created - membership -

• Page 19, Line 15duties - repeal. (a)  The enterprise board of directors is created to

• Page 19, Line 16administer the enterprise. The board consists of the following nine members:

• Page 19, Line 17(I)  The following six members appointed by the governor and confirmed by the senate:

• Page 19, Line 18(A)  A representative of residential buildings;

• Page 19, Line 19(B)  Two representatives of commercial buildings, such as offices, mixed-use properties, multifamily homes, or hospitals;

• Page 19, Line 20(C)  An expert in building energy efficiency and decarbonization;

• Page 19, Line 21(D)  A local government representative with expertise in planning, energy codes, or building decarbonization; and

• Page 20, Line 1(E)  A utility representative;

• (II)  The director of the office or the director's designee;

• Page 20, Line 2(III)  The executive director of the department of public

• Page 20, Line 3health and environment or the executive director's designee; and

• Page 20, Line 4(IV)  The director of the public utilities commission or the director's designee.

• Page 20, Line 5(b) (I)  The governor shall appoint initial members to the

• Page 20, Line 6board pursuant to subsection (4)(a)(I) of this section on or before September 1, 2025.

• Page 20, Line 7(II)  This subsection (4)(b) is repealed, effective July 1, 2026.

• Page 20, Line 8(c) (I)  Board members appointed pursuant to subsection

• Page 20, Line 9(4)(a)(I) of this section serve three-year terms. A board member may serve an unlimited number of terms.

• Page 20, Line 10(II)  Notwithstanding subsection (4)(c)(I) of this section,

• Page 20, Line 11the governor shall make the initial terms of two of the board

• Page 20, Line 12members who are appointed pursuant to subsection (4)(a)(I) of this section two years.

• Page 20, Line 13(d)  Board members serving pursuant to subsection (4)(a)(I)

• Page 20, Line 14of this section may receive compensation from the enterprise on

• Page 20, Line 15a per diem basis for reasonable expenses actually incurred in the performance of their duties.

• Page 20, Line 16(e) (I)  The chair and vice-chair of the board are selected

• Page 20, Line 17by the members of the board in accordance with the board's bylaws.

• Page 20, Line 18(II) (A)  The director of the office or the director's

• Page 21, Line 1designee shall call the first meeting of the board, and the board

• Page 21, Line 2shall select the chair and vice-chair at that meeting in accordance with subsection (4)(e)(I) of this section.

• Page 21, Line 3(B)  This subsection (4)(e)(II) is repealed, effective July 1, 2026.

• Page 21, Line 4(5)  Powers and duties - building decarbonization fee - rules.

• Page 21, Line 5(a)  In addition to any other powers and duties specified in this

• Page 21, Line 6section, the board has the following powers and duties on behalf of the enterprise:

• Page 21, Line 7(I)  To adopt procedures for conducting the board's affairs;

• Page 21, Line 8(II)  To engage the services of contractors, consultants,

• Page 21, Line 9the division of administration described in section 25-1-102 (2)(a),

• Page 21, Line 10and the staff of the office for professional and technical

• Page 21, Line 11assistance and advice and to supply other services related to

• Page 21, Line 12the conduct of the affairs of the enterprise without regard to

• Page 21, Line 13the "Procurement Code", articles 101 to 112 of title 24. The

• Page 21, Line 14enterprise shall engage the attorney general's office for legal

• Page 21, Line 15services. The enterprise may contract with the office for the

• Page 21, Line 16provision of office space and administrative staff to the enterprise at a fair market rate.

• Page 21, Line 17(III)  To establish and administer a program through which

• Page 21, Line 18owners of covered buildings may apply for, and the board may

• Page 21, Line 19review and approve applications for, financing or technical

• Page 21, Line 20assistance for building decarbonization measures, including, but

• Page 21, Line 21not limited to, participating in programs that help finance

• Page 21, Line 22energy efficiency measures, electrification measures, and other

• Page 22, Line 1energy upgrades; conducting building energy audits; employing

• Page 22, Line 2or consulting with building engineers; and purchasing energy use tracking software and providing training on such software;

• Page 22, Line 3(IV)  To impose the building decarbonization fee described in subsection (5)(b) of this section; and

• Page 22, Line 4(V)  To have and exercise all rights and powers necessary

• Page 22, Line 5or incidental to or implied from the specific powers and duties granted by this section.

• Page 22, Line 6(b) (I)  Beginning in state fiscal year 2026-27 and in

• Page 22, Line 7furtherance of the enterprise's business purposes, the board

• Page 22, Line 8shall adopt rules for the purpose of setting the amount of the

• Page 22, Line 9building decarbonization fee at the maximum amount authorized

• Page 22, Line 10in this subsection (5) to be imposed upon all covered building

• Page 22, Line 11owners; except that the fee shall not be imposed on the owner of a public building, as defined in section 25-7-142 (2)(t).

• Page 22, Line 12(II)  On or before November 1, 2025, and on or before each

• Page 22, Line 13November 1 of each year thereafter, and except as provided in

• Page 22, Line 14subsection (5)(b)(III) of this section, each owner of a covered

• Page 22, Line 15building shall pay a building decarbonization fee in an amount

• Page 22, Line 16of four hundred dollars to the office, which shall collect the building decarbonization fee on behalf of the enterprise.

• Page 22, Line 17(III)  Beginning in state fiscal year 2027-28, the board may

• Page 22, Line 18only increase the building decarbonization fee from the

• Page 22, Line 19previous year's building decarbonization fee to adjust for

• Page 22, Line 20inflation and, on or before March 15 of each of the state fiscal

• Page 22, Line 21years thereafter, shall notify the office of the adjusted amount

• Page 22, Line 22of the building decarbonization fee, if the building

• Page 23, Line 1decarbonization fee has been adjusted. On or before April 15 of

• Page 23, Line 2each of the state fiscal years thereafter, the enterprise shall

• Page 23, Line 3publish the updated amount of the fee on the enterprise's website.

• Page 23, Line 4(IV)  Money collected as a building decarbonization fee

• Page 23, Line 5shall be credited to the building decarbonization enterprise cash fund.

• Page 23, Line 6(V)  Notwithstanding subsection (5)(b)(I) of this section,

• Page 23, Line 7the board shall not set the building decarbonization fee in an

• Page 23, Line 8amount higher than that authorized by subsections (5)(b)(II) and (5)(b)(III) of this section.

• Page 23, Line 9(VI)  Money collected by the office for transfer to the

• Page 23, Line 10building decarbonization fund pursuant to subsection (5)(b)(IV) of this section:

• Page 23, Line 11(A)  Is collected for the enterprise;

• Page 23, Line 12(B)  Is custodial money intended for the enterprise and

• Page 23, Line 13held temporarily by the office and the state treasurer solely

• Page 23, Line 14for the purpose of transferring the money to the building decarbonization fund for use by the enterprise; and

• Page 23, Line 15(C)  Based on the enterprise's status as an enterprise, is

• Page 23, Line 16not subject to section 20 of article X of the state constitution at any time during the money's collection, transfer, and use.

• Page 23, Line 17(6)  Building decarbonization enterprise cash fund - creation

• Page 23, Line 18- repeal. (a)  The building decarbonization enterprise cash fund

• Page 23, Line 19is created in the state treasury. The building decarbonization fund consists of:

• Page 23, Line 20(I)  Money received from a building decarbonization fee imposed pursuant to subsection (5)(b) of this section;

• Page 24, Line 1(II)  Any money received from the issuance of revenue bonds, as described in subsection (3)(c)(II) of this section; and

• Page 24, Line 2(III)  Any other money that the general assembly may appropriate or transfer to the building decarbonization fund.

• Page 24, Line 3(b) (I)  Section 24-77-108 does not apply to the enterprise

• Page 24, Line 4because the total amount of money credited or appropriated to

• Page 24, Line 5the building decarbonization fund as a building decarbonization

• Page 24, Line 6fee shall not exceed one hundred million dollars in the first five fiscal years of the enterprise's existence.

• Page 24, Line 7(II)  This subsection (6)(b) is repealed, effective July 1, 2031.

• Page 24, Line 8(c)  Subject to annual appropriation by the general

• Page 24, Line 9assembly, the enterprise may expend money from the building

• Page 24, Line 10decarbonization fund for the purposes set forth in this section

• Page 24, Line 11and to pay the enterprise's reasonable and necessary operating

• Page 24, Line 12expenses. The state treasurer shall credit all interest and

• Page 24, Line 13income derived from the deposit and investment of money in the

• Page 24, Line 14building decarbonization fund to the building decarbonization fund.

• Page 24, Line 15(d)  Any unexpended and unencumbered money remaining

• Page 24, Line 16in the building decarbonization fund at the end of a fiscal year

• Page 24, Line 17remains in the building decarbonization fund and is not credited or transferred to the general fund.

• Page 24, Line 18(7)  Legislative review of building decarbonization enterprise.

• Page 24, Line 19On or before December 1 of each year, the enterprise shall

• Page 24, Line 20submit an annual report to the general assembly detailing the

• Page 24, Line 21enterprise's expenditures and program outcomes from the

• Page 25, Line 1preceding year and the enterprise's financial projections for the following year.

• Page 25, Line 2SECTION 5.  In Colorado Revised Statutes, 25-7-122, amend(1)(i) as follows:

• Page 25, Line 325-7-122.  Civil penalties - rules - definitions. (1)  Upon

• Page 25, Line 4application of the division, the division may collect penalties as

• Page 25, Line 5determined under this article 7 by instituting an action in the district court

• Page 25, Line 6for the district in which the air pollution source affected is located, in accordance with the following provisions:

• Page 25, Line 7 (i) (I)  On and after January 1, 2024, and Except as provided

• Page 25, Line 8in subsection (1)(i)(II) of this section, an owner of a covered building that violates:

• Page 25, Line 9(A)  Section 25-7-142 (3) or (6) is subject to a civil penalty of up

• Page 25, Line 10to five hundred seventy-seven dollars for a first violation and up to two

• Page 25, Line 11thousand three hundred dollars for each subsequent violation, As part

• Page 25, Line 12of the requirement that the commission adopt rules to establish

• Page 25, Line 13performance standards pursuant to section 25-7-142 (8)(c), the

• Page 25, Line 14commission shall establish by rule, with regard to a violation of the

• Page 25, Line 15performance standards, civil penalties in an amount not to exceed two

• Page 25, Line 16thousand dollars for a first violation and five thousand dollars for a

• Page 25, Line 17subsequent violation which amounts the commission shall, by rule,

• Page 25, Line 18annually adjust based on the annual percentage change in the

• Page 25, Line 19United States department of labor's bureau of labor statistics

• Page 25, Line 20consumer price index, or a successor index, for

• Page 25, Line 21Denver-Aurora-Lakewood for all items paid by urban consumers.

• Page 25, Line 22(B)  On and after January 1, 2030, performance standards

• Page 26, Line 1adopted by the commission pursuant to section 25-7-142 or that

• Page 26, Line 2violates the requirements of section 25-7-142 (8.6) is, for a first

• Page 26, Line 3violation, subject to a civil penalty in an amount not to exceed

• Page 26, Line 4two thousand three hundred dollars for every thirty days that

• Page 26, Line 5the owner is in violation and, for each subsequent violation,

• Page 26, Line 6subject to a penalty in an amount not to exceed five thousand

• Page 26, Line 7eight hundred dollars for every thirty days that the owner is

• Page 26, Line 8in violation, which amounts the commission, beginning in 2026,

• Page 26, Line 9shall, by rule, annually adjust in accordance with subsection(1)(i)(I)(A) of this section.

• Page 26, Line 10(II)  The division shall not assess a civil penalty for a violation related to a public building.

• Page 26, Line 11(II.5)  Notwithstanding rules that the commission adopted

• Page 26, Line 12before July 1, 2025, a civil penalty for a violation of section

• Page 26, Line 1325-7-142 or rules adopted by the commission to implement section

• Page 26, Line 1425-7-142 shall be determined in a manner consistent with this subsection (1)(i) and subsection (2) of this section.

• Page 26, Line 15(III)  Notwithstanding section 25-7-129, the division shall transmit

• Page 26, Line 16civil penalties collected pursuant to this subsection (1)(i) to the state

• Page 26, Line 17treasurer, who this subsection (1)(i), as paid by owners of covered

• Page 26, Line 18buildings for a violation of section 25-7-142 or rules adopted by

• Page 26, Line 19the commission to implement section 25-7-142, shall credit them be

• Page 26, Line 20credited to the climate change mitigation and adaptation fund created in section 24-38.5-102.6.

• Page 26, Line 21(IV)  As used in this subsection (1)(i):

• Page 26, Line 22(A)  "Covered building" has the meaning set forth in section

• Page 26, Line 2325-7-142 (2)(j).

• (B)  "Owner" has the meaning set forth in section 25-7-142 (2)(r).

• Page 27, Line 1SECTION 6.  In Colorado Revised Statutes, 24-38.5-403, add (4) as follows:

• Page 27, Line 224-38.5-403.  Energy code training - energy code adoption -

• Page 27, Line 3grant writing assistance. (4)  Notwithstanding subsection (3) of

• Page 27, Line 4this section, the Colorado energy office may use funding

• Page 27, Line 5provided through subsection (3) of this section to cover the costs of the following:

• Page 27, Line 6(a)  The energy code board convened pursuant to section 24-38.5-401 (2);

• Page 27, Line 7(b)  The task force created in section 25-7-142 (8.5); and

• Page 27, Line 8(c)  The costs to the Colorado energy office for

• Page 27, Line 9participating in rule-making that the air quality control commission engages in pursuant to section 25-7-142.

• Page 27, Line 10SECTION 7.  In Colorado Revised Statutes, 24-38.5-102.6, amend (1) introductory portion and (1)(a) as follows:

• Page 27, Line 1124-38.5-102.6.  Climate change mitigation and adaptation fund

• Page 27, Line 12- creation - use. (1)  The climate change mitigation and adaptation fund,

• Page 27, Line 13referred to in this section as the "fund", is hereby created in the state treasury. The fund consists of:

• Page 27, Line 14(a)  Civil penalties assessed pursuant to section 25-7-122(1)(i)and credited to the fund pursuant to section 25-7-122 (1)(i)(III);

• Page 27, Line 15SECTION 8.  In Colorado Revised Statutes, 24-38.5-112, amend(1)(a)(III) and (1)(a)(IV) as follows:

• Page 27, Line 1624-38.5-112.  Building performance program - duties of the

• Page 27, Line 17office - county assessor records database - fees - definitions. (1)  The

• Page 27, Line 18Colorado energy office shall implement a building performance program as follows:

• Page 28, Line 1(a)  Based on county assessor records and other available sources

• Page 28, Line 2of information, the office shall administer the building performance program by:

• Page 28, Line 3(III)  Maintaining a list of noncompliant owners; and

• Page 28, Line 4(IV)  In a form and manner determined by the office, in

• Page 28, Line 5consultation with the division of administration in the department of

• Page 28, Line 6public health and environment, periodically providing the division with

• Page 28, Line 7a list of noncompliant owners for the division's enforcement of the building performance program. pursuant to section 25-7-122 (1)(i).

• Page 28, Line 8SECTION 9.  Appropriation. (1)  For the 2025-26 state fiscal

• Page 28, Line 9year, $3,000,000 is appropriated to the office of the governor for use by

• Page 28, Line 10the Colorado energy office. This appropriation is from the building

• Page 28, Line 11decarbonization enterprise cash fund created in section24-38.5-123

• Page 28, Line 12(6)(a),C.R.S. To implement this act, the office may use this appropriation for the building decarbonization enterprise.

• Page 28, Line 14SECTION 10.  Applicability. This act applies to conduct occurring on or after the effective date of this act.

• Page 28, Line 15SECTION 11.  Safety clause. The general assembly finds,

• Page 28, Line 16determines, and declares that this act is necessary for the immediate

• Page 28, Line 17preservation of the public peace, health, or safety or for appropriations for

• Page 28, Line 18the support and maintenance of the departments of the state and state institutions.