Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 24-0522.01 Jennifer Berman x3286
HOUSE BILL 24-1362
House Committees Senate Committees
Agriculture, Water & Natural Resources
A BILL FOR AN ACT
C
ONCERNING MEASURES TO PROM OTE THE USE OF GRAYWATER .101
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
.)
Under current law, a board of county commissioners or governing
body of a municipality (local government) may authorize the use of
graywater within its jurisdiction. Graywater refers to certain types of
wastewater that is collected from fixtures before it is treated and put to
certain beneficial uses.
The bill authorizes the installation of graywater treatment works
and the use of graywater statewide; except that a local government:
! May adopt an ordinance or a resolution prohibiting the
HOUSE SPONSORSHIP
Lukens and Catlin, McCluskie, Frizell
SENATE SPONSORSHIP
Roberts and Simpson,
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. installation of graywater treatment works or the use of all
graywater or categories of graywater use within its
jurisdiction; and
! Shall notify the division of administration in the
department of public health and environment of any such
local ordinance or resolution adopted.
To incentivize the installation of graywater treatment works within
a residential building for indoor water reuse, the bill also creates a state
income tax credit that allows a taxpayer to claim a credit up to 50% of the
cost of such an installation or up to $5,000, whichever amount is less.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 25-8-205.4 as2
follows:3
25-8-205.4. Statewide authorization of graywater use - local4
government notice required to opt out. (1) E
XCEPT AS PROVIDED IN5
SUBSECTION (2) OF THIS SECTION, A PERSON MAY INSTALL GRAYWATER6
TREATMENT WORKS AND USE GRAYWATER IN ACCORDANCE WITH SECTION7
25-8-205 (1)(g)
AND RULES ADOPTED PURSUANT TO SECTION 25-8-2058
(1)(g).9
(2) (a) A
BOARD OF COUNTY COMMISSIONERS OR GOVERNING BODY10
OF A MUNICIPALITY MAY ADOPT A RESOLUTION OR AN ORDINANCE11
PURSUANT TO SECTION 30-11-107 (1)(kk) OR 31-15-601 (1)(m):12
(I) P
ROHIBITING THE INSTALLATION OF GRAYWATER TREATMENT13
WORKS AND THE USE OF ALL GRAYWATER IN THE COUNTY OR14
MUNICIPALITY; OR15
(II) P
ROHIBITING ONE OR MORE CATEGORIES OF GRAYWATER USE16
THAT THE COMMISSION ESTABLISHES IN RULES ADOPTED PURSUANT TO17
SECTION 25-8-205 (1)(g).18
(b) A
BOARD OF COUNTY COMMISSIONERS OR GOVERNING BODY OF19
A MUNICIPALITY THAT ADOPTS A RESOLUTION OR AN ORDINANCE20
HB24-1362-2- PURSUANT TO SUBSECTION (2)(a) OF THIS SECTION SHALL NOTIFY THE1
DIVISION THAT THE BOARD OF COUNTY COMMISSIONERS OR GOVERNING2
BODY OF A MUNICIPALITY PROHIBITS THE USE OF ALL GRAYWATER OR3
PROHIBITS CERTAIN CATEGORIES OF GRAYWATER USE IN THE COUNTY OR4
MUNICIPALITY.5
(3) A
BOARD OF COUNTY COMMISSIONERS OR GOVERNING BODY OF6
A MUNICIPALITY THAT SENDS A NOTICE PURSUANT TO SUBSECTION (2)(b)7
OF THIS SECTION MAY SUBSEQUENTLY ADOPT A RESOLUTION PURS UANT TO8
SECTION 30-11-107 (1)(kk) OR AN ORDINANCE PURSUANT TO SECTION9
31-15-601 (1)(m)
TO AUTHORIZE THE INSTALLATION OF GRAYWATER10
TREATMENT WORKS AND THE USE OF GRAYWATER OR TO AUTHORIZE11
CATEGORIES OF GRAYWATER USE PREVIOUSLY PROHIBITED . A BOARD OR12
GOVERNING BODY THAT SUBSEQUENTLY AUTHORIZES THE USE OF13
GRAYWATER PURSUANT TO THIS SUBSECTION (3) SHALL PROMPTLY NOTIFY14
THE DIVISION OF THE SUBSEQUENT AUTHORIZATION .15
SECTION 2. In Colorado Revised Statutes, 30-11-107, amend16
(1)(kk) as follows:17
30-11-107. Powers of the board. (1) The board of county18
commissioners of each county has power at any meeting:19
(kk) (I) To adopt a resolution, to authorize,
in consultation with20
the local board of health, local public health agencies, and any water and21
wastewater service providers serving the county,
REGARDING the use of22
graywater, as defined in section 25-8-103 (8.3), C.R.S.,
in compliance23
with any regulation adopted pursuant to section 25-8-205 (1)(g), C.R.S.,24
and to enforce compliance with the board's resolution. A
BOARD OF25
COUNTY COMMISSIONERS :26
(A) M
AY ADOPT A RESOLUTION PROHIBITING THE INSTALLATION27
HB24-1362
-3- OF GRAYWATER TREATMENT WORKS , AS DEFINED IN SECTION 25-8-1031
(8.4),
AND THE USE OF ALL GRAYWATER OR PROHIBITING ONE OR MORE2
CATEGORIES OF GRAYWATER USE THAT THE WATER QUALITY CONTROL3
COMMISSION ESTABLISHES IN RULES ADOPTED PURSUANT TO SECTION4
25-8-205 (1)(g);
AND5
(B) P
URSUANT TO SECTION 25-8-205.4 (2)(b), SHALL NOTIFY THE6
DIVISION OF ADMINISTRATION WITHIN THE DEPARTMENT OF PUBLIC7
HEALTH AND ENVIRONMENT OF ANY RESOLUTION ADOPTED PURSUANT TO8
SUBSECTION (1)(kk)(I)(A) OF THIS SECTION. A BOARD OF COUNTY9
COMMISSIONERS THAT SENDS NOTICE PURSUANT TO THIS SUBSECTION10
(1)(kk)(I)(B)
MAY SUBSEQUENTLY AUTHORIZE THE INSTALLATION OF11
GRAYWATER TREATMENT WORKS AND THE USE OF GRAYWATER OR12
AUTHORIZE CATEGORIES OF GRAYWATER USE PREVIOUSLY PROHIBITED AT13
ANY TIME BY ADOPTING A RESOLUTION . A BOARD OF COUNTY14
COMMISSIONERS THAT SUBSEQUENTLY AUTHORIZES THE USE OF15
GRAYWATER SHALL PROMPTLY NOTIFY THE DIVISION OF ADMINISTRATION16
WITHIN THE DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT OF THE17
SUBSEQUENT AUTHORIZATION .18
(II) Before adopting a resolution to authorize the use of graywater
19
pursuant to subparagraph (I) of this paragraph (kk), A board of county20
commissioners
THAT HAS NOT PROHIBITED ALL GRAYWATER USE21
PURSUANT TO SUBSECTION (1)(kk)(I) OF THIS SECTION is encouraged to22
enter into a memorandum of understanding with the local board of health,23
local public health agencies, and any water and wastewater service24
providers serving the county concerning graywater usage and the proper25
installation and operation of graywater treatment works, as defined in26
section 25-8-103 (8.4). C.R.S.
27
HB24-1362
-4- SECTION 3. In Colorado Revised Statutes, 31-15-601, amend1
(1)(m) as follows:2
31-15-601. Building and fire regulations - emission3
performance standards required - reporting. (1) The governing bodies4
of municipalities have the following powers in relation to building and5
fire regulations:6
(m) (I) To adopt an ordinance, to authorize, in consultation with7
the local board of health, local public health agencies, and any water and8
wastewater service providers serving the municipality,
REGARDING the9
use of graywater, as defined in section 25-8-103 (8.3), C.R.S.,
in10
compliance with any regulation adopted pursuant to section 25-8-20511
(1)(g), C.R.S., and to enforce compliance with the governing body's12
ordinance. T
HE GOVERNING BODY OF A MUNICIPALITY :13
(A) M
AY ADOPT AN ORDINANCE PROHIBITING THE INSTALLATION14
OF GRAYWATER TREATMENT WORKS , AS DEFINED IN SECTION 25-8-10315
(8.4),
AND THE USE OF ALL GRAYWATER OR PROHIBITING ONE OR MORE16
CATEGORIES OF GRAYWATER USE THAT THE WATER QUALITY CONTROL17
COMMISSION ESTABLISHES IN RULES ADOPTED PURSUANT TO SECTION18
25-8-205 (1)(g);
AND19
(B) P
URSUANT TO SECTION 25-8-205.4 (2)(b), SHALL NOTIFY THE20
DIVISION OF ADMINISTRATION WITHIN THE DEPARTMENT OF PUBLIC21
HEALTH AND ENVIRONMENT OF ANY ORDINANCE ADOPTED PURSUANT TO22
SUBSECTION (1)(m)(I)(A) OF THIS SECTION. A GOVERNING BODY OF A23
MUNICIPALITY THAT SENDS NOTICE PURSUANT TO THIS SUBSECTION24
(1)(m)(I)(B)
MAY SUBSEQUENTLY AUTHORIZE THE INSTALLATION OF25
GRAYWATER TREATMENT WORKS AND THE USE OF GRAYWATER OR26
AUTHORIZE CATEGORIES OF GRAYWATER USE PREVIOUSLY PROHIBITED AT27
HB24-1362
-5- ANY TIME BY ADOPTING AN ORDINANCE . A GOVERNING BODY OF A1
MUNICIPALITY THAT SUBSEQUENTLY AUTHORIZES THE USE OF GRAYWATER2
SHALL PROMPTLY NOTIFY THE DIVISION OF ADMINISTRATION WITHIN THE3
DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT OF THE SUBSEQUENT4
AUTHORIZATION.5
(II) Before adopting an ordinance to authorize the use of6
graywater pursuant to subparagraph (I) of this paragraph (m), the A7
municipal governing body
THAT HAS NOT PROHIBITED ALL GRAYWATER8
USE PURSUANT TO SUBSECTION (1)(m)(I) OF THIS SECTION is encouraged9
to enter into a memorandum of understanding with the local board of10
health, local public health agencies, and any water and wastewater service11
providers serving the municipality concerning graywater usage and the12
proper installation and operation of graywater treatment works, as defined13
in section 25-8-103 (8.4). C.R.S.
14
SECTION 4. In Colorado Revised Statutes, 25-8-205, amend15
(1)(g) as follows:16
25-8-205. Control regulations. (1) The commission may17
promulgate control regulations for the following purposes:18
(g) (I) To describe requirements, prohibitions, and standards for19
the use of graywater for nondrinking purposes, to encourage the use of20
graywater, and to protect public health and water quality.21
(II) Except as authorized in section 25-8-205.3, graywater may be22
used only in areas where the local city, city and county, or county has23
adopted an ordinance or resolution approving the use of graywater24
pursuant to section 30-11-107 (1)(kk) or 31-15-601 (1)(m). The A city,25
city and county, or county that has adopted an ordinance or resolution26
approving REGARDING the use of graywater pursuant to section 30-11-10727
HB24-1362
-6- (1)(kk) or 31-15-601 (1)(m) has exclusive enforcement authority1
regarding compliance with the ordinance or resolution.2
(III) Use of graywater shall be IS allowed only in accordance with3
the terms and conditions of the decrees, contracts, and well permits4
applicable to the use of the source water rights or source water and any5
return flows therefrom FROM THE SOURCE WATER , and no use of6
graywater
USE shall NOT be allowed IN A MANNER that would
IS not be7
allowed under such decrees, contracts, or permits. if the graywater8
ordinance or resolution did not exist.9
(IV) A local city, city and county, or county may only authorize10
the use of graywater in accordance with federal, state, and local11
requirements.12
SECTION 5. In Colorado Revised Statutes, 25-8-205.3, repeal13
(2)(c) as follows:14
25-8-205.3. Exemption from control regulations for graywater15
research - definition. (2) A person collecting, treating, or using16
graywater pursuant to this section:17
(c) May collect, treat, and use the graywater in an area that is not18
within the jurisdiction of any city, city and county, or county that has19
adopted an ordinance or resolution authorizing graywater use pursuant to20
section 25-8-205 (1)(g)(II);21
SECTION 6. In Colorado Revised Statutes, add 39-22-560 as22
follows:23
39-22-560. Tax credit for installing graywater treatment24
works in a residential building for indoor water reuse - tax25
preference performance statement - legislative declaration -26
definition - report - repeal. (1) (a) T
HE GENERAL ASSEMBLY FINDS AND27
HB24-1362
-7- DECLARES THAT:1
(I) G
RAYWATER USE IS RECOGNIZED IN THE STATE WATER PLAN2
ADOPTED PURSUANT TO SECTION 37-60-106.3 AS AN IMPORTANT WATER3
CONSERVATION MEASURE THAT COLORADO COMMUNITIES MAY4
IMPLEMENT TO MAXIMIZE WATER SUPPLIES ;5
(II) I
F GRAYWATER TREATMENT WORKS ARE INSTALLED AT A HOME6
OR BUSINESS, THE AMOUNT OF WATER NEEDED TO OPERATE THE HOME OR7
BUSINESS IS REDUCED; AND8
(III) T
HE PURPOSE OF THE TAX CREDIT AUTHORIZED UNDER9
SUBSECTION (3) OF THIS SECTION IS TO INCENTIVIZE THE VOLUNTARY10
INSTALLATION OF GRAYWATER TREATMENT WORKS IN RESIDENTIAL11
BUILDINGS FOR INDOOR WATER REUSE .12
(b) I
N ACCORDANCE WITH SECTION 39-21-304 (1), WHICH13
REQUIRES EACH BILL THAT CREATES A NEW TAX EXPENDITURE TO INCLUDE14
A TAX PREFERENCE PERFORMANCE STATEMENT AS PART OF A STATUTORY15
LEGISLATIVE DECLARATION, THE GENERAL ASSEMBLY FURTHER FINDS AND16
DECLARES THAT:17
(I) T
HE GENERAL LEGISLATIVE PURPOSE OF THE TAX CREDIT18
AUTHORIZED UNDER SUBSECTION (3) OF THIS SECTION IS TO INDUCE19
CERTAIN DESIGNATED BEHAVIORS BY TAXPAYERS , SPECIFICALLY THE20
INSTALLATION OF GRAYWATER TREATMENT WORKS IN RESIDENTIAL21
BUILDINGS FOR INDOOR WATER REUSE ; AND22
(II) I
N ORDER TO ALLOW THE GENERAL ASSEMBLY AND THE STATE23
AUDITOR TO MEASURE THE EFFECTIVENESS OF THE TAX CREDIT , THE24
DEPARTMENT OF REVENUE SHALL SUBMIT TO THE GENERAL ASSEMBLY25
AND THE STATE AUDITOR AN ANNUAL REPORT IN ACCORDANCE WITH26
SUBSECTION (5) OF THIS SECTION DETAILING THE INSTALLATION OF27
HB24-1362
-8- GRAYWATER TREATMENT WORKS IN RESIDENTIAL BUILDINGS FOR INDOOR1
WATER REUSE, AS REPORTED BY TAXPAYERS CLAIMING THE TAX CREDIT2
AUTHORIZED UNDER SUBSECTION (3) OF THIS SECTION.3
(2) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE4
REQUIRES, "GRAYWATER TREATMENT WORKS " HAS THE MEANING SET5
FORTH IN SECTION 25-8-103 (8.4).6
(3) (a) F
OR INCOME TAX YEARS COMMENCING ON OR AFTER7
J
ANUARY 1, 2025, BUT BEFORE JANUARY 1, 2035, AND EXCEPT AS8
PROVIDED IN SUBSECTION (3)(b) OF THIS SECTION, A TAXPAYER IS9
ALLOWED A TAX CREDIT AGAINST THE TAX IMPOSED PURSUANT TO THIS10
ARTICLE 22 IN AN AMOUNT EQUAL TO FIFTY PERCENT OF THE AGGREGATE11
COST FOR PURCHASING AND INSTALLING GRAYWATER TREATMENT WORKS12
IN A RESIDENTIAL BUILDING FOR INDOOR WATER REUSE .13
(b) A
TAXPAYER MAY ONLY CLAIM A TAX CREDIT PURSUANT TO14
SUBSECTION (3)(a) OF THIS SECTION IN AN AMOUNT UP TO FIVE THOUSAND15
DOLLARS IN A SINGLE INCOME TAX YEAR .16
(4) I
F THE AMOUNT OF A TAX CREDIT AUTHORIZED UNDER17
SUBSECTION (3) OF THIS SECTION EXCEEDS A TAXPAYER 'S ACTUAL TAX18
LIABILITY FOR AN INCOME TAX YEAR, THE AMOUNT OF THE TAX CREDIT19
NOT USED TO OFFSET INCOME TAX LIABILITY FOR THAT INCOME TAX YEAR20
IS NOT REFUNDED TO THE TAXPAYER . THE TAXPAYER MAY CARRY21
FORWARD AND APPLY THE UNUSED TAX CREDIT AGAINST THE INCOME TAX22
THAT THE TAXPAYER OWES IN EACH OF THE FIVE SUCCEEDING INCOME TAX23
YEARS, BUT THE TAXPAYER SHALL APPLY THE TAX CREDIT AGAINST THE24
INCOME TAX DUE FOR THE EARLIEST OF THE INCOME TAX YEARS POSSIBLE .25
A
NY AMOUNT OF THE TAX CREDIT THAT REMAINS AFTER THIS PERIOD IS26
NOT REFUNDABLE AND SHALL NOT BE CREDITED TO THE TAXPAYER .27
HB24-1362
-9- (5) PURSUANT TO SECTION 39-21-304 (3), NOTWITHSTANDING1
SECTION 24-1-136 (11)(a)(I), AND FOR THE PURPOSE OF PROVIDING DATA2
THAT ALLOWS THE GENERAL ASSEMBLY AND THE STATE AUDITOR TO3
MEASURE THE EFFECTIVENESS OF THE TAX CREDIT CREATED IN4
SUBSECTION (3) OF THIS SECTION, THE DEPARTMENT OF REVENUE , ON OR5
BEFORE JANUARY 1, 2026, AND ON OR BEFORE JANUARY 1 OF EACH YEAR6
THEREAFTER THROUGH JANUARY 1, 2036, SHALL SUBMIT TO THE GENERAL7
ASSEMBLY AND THE STATE AUDITOR A REPORT DETAILING THE8
INSTALLATION OF GRAYWATER TREATMENT WORKS , AS REPORTED BY9
TAXPAYERS CLAIMING THE TAX CREDIT AUTHORIZED UNDER SUBSECTION10
(3)
OF THIS SECTION. THE TAX CREDIT ESTABLISHED IN THIS SECTION11
MEETS ITS PURPOSE IF THE NUMBER OF GRAYWATER TREATMENT WORKS12
THAT ARE INSTALLED IN RESIDENTIAL BUILDINGS FOR INDOOR WATER13
REUSE WITHIN FIVE YEARS AFTER THE TAX CREDIT BECOMES EFFECTIVE IS14
SIGNIFICANTLY HIGHER THAN THE NUMBER OF GRAYWATER TREATMENT15
WORKS THAT HAVE BEEN INSTALLED IN RESIDENTIAL BUILDINGS FOR16
INDOOR WATER USE DURING THE FIVE YEARS BEFORE THE TAX CREDIT17
BECOMES EFFECTIVE, AS DETERMINED BY THE GENERAL ASSEMBLY AND18
THE STATE AUDITOR PURSUANT TO SECTION 39-21-304 (3).19
(6) T
HIS SECTION IS REPEALED, EFFECTIVE DECEMBER 31, 2041.20
SECTION 7. Act subject to petition - effective date. This act21
takes effect at 12:01 a.m. on the day following the expiration of the22
ninety-day period after final adjournment of the general assembly; except23
that, if a referendum petition is filed pursuant to section 1 (3) of article V24
of the state constitution against this act or an item, section, or part of this25
act within such period, then the act, item, section, or part will not take26
effect unless approved by the people at the general election to be held in27
HB24-1362
-10- November 2024 and, in such case, will take effect on the date of the1
official declaration of the vote thereon by the governor.2
HB24-1362
-11-