HB 25-1268
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1268: UTILITY ON-BILL REPAYMENT PROGRAM FINANCING
Prime Sponsors:
Rep. Joseph; Froelich
Sen. Mullica; Winter F.
Published for: House Appropriations
Drafting number: LLS 25-0286
Fiscal Analyst:
Matt Bishop, 303-866-4796
matt.bishop@coleg.gov
Version: Third Revised Note
Date: April 18, 2025
Fiscal note status: The revised fiscal note reflects the introduced bill, as amended by the House Energy
and Environment Committee and the House Finance Committee. It has been updated to reflect new
information.
Summary Information
Overview. The bill creates a financing mechanism for energy efficiency and electrification measures using
money from the Unclaimed Property Trust Fund.
Types of impacts. The bill is projected to affect the following areas from FY 2025-26 to FY 2045-46:
State Revenue
State Loan
State Expenditures
TABOR Refunds
Appropriations. No appropriation is required, as the On-Bill Cash Fund and the On-Bill Program
Administration Cash Fund are continuously appropriated to the Colorado Energy Office.
Table 1
State Fiscal Impacts
Type of Impact
1
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue -$319,551 -$515,274
State Expenditures $20,235,025 $20,178,361
Transferred Funds $25,000,000 $25,000,000
Change in TABOR Refunds $142,949 $291,887
Change in State FTE 0.8 FTE 1.3 FTE
1
Fund sources for these impacts are shown in the tables below. Page 2
April 18, 2025 HB 25-1268
Table 1A
State Revenue
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $0
On-Bill Cash Fund $142,949 $291,887
On-Bill Program Administration Cash Fund $87,500 $150,000
Unclaimed Property Trust Fund
1
-$550,000 -$957,161
Total Revenue -$319,551 -$515,274
1
This impact is conditional upon the state being no more than $50 million below the Referendum C cap.
Table 1B
State Loans
1
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Unclaimed Property Trust Fund -$25 million -$25 million
On-Bill Cash Fund $25 million $25 million
Net Transfer $0 $0
1
This transfer is in the form of an interest-free loan from the Unclaimed Property Trust Fund to the
On-Bill Cash Fund. The loan must be repaid by July 1, 2046. Use of the Unclaimed Property Trust Fund
to make the loan is conditional upon the state being no more than $50 million below the
Referendum C cap. If the state is more than $50 million below the cap, money from the sale of
insurance premium tax credits would be the source of money to the On-Bill Cash Fund instead.
Table 1C
State Expenditures
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $0
Cash Funds $20,217,109 $20,149,290
Federal Funds $0 $0
Centrally Appropriated $17,916 $29,071
Total Expenditures $20,235,025 $20,178,361
Total FTE 0.8 FTE 1.3 FTE
Page 3
April 18, 2025 HB 25-1268
Summary of Legislation
The bill creates the On-Bill Program in the Colorado Energy Office (CEO). The office can lend
money to a participating utility, which can use the money to complete energy efficiency or
electrification measures at the request of an eligible utility customer. The customer then repays
the utility through a charge on their utility bill. The repayment obligation is tied to the property
improved, so the beneficiary of the upgrade is responsible for the payments even if the property
is sold.
Participating utilities must occasionally report on their on-bill programs to the Colorado Energy
Office, unless they already file a similar report to the Public Utilities Commission. A utility with
more than 500,000 customers must file an application with the commission to establish an
on-bill program by December 31, 2026, and they must either propose participating in the state
financing program or explain why it will not participate by December 31, 2027.
The bill loans $50 million from the Unclaimed Property Trust Fund to the new On-Bill Cash Fund
over two years to support the program, unless certain conditions are met and the program is
funded by the sale of insurance premium tax credits instead, as described below. CEO must
repay the loan, without interest, by July 1, 2045. Loans that CEO makes to a utility earn 1 percent
interest, which accrues to the Unclaimed Property Trust Fund. If claims of unclaimed property
exceed the balance of the fund, those claims must be paid from the General Fund. By
December 31 each year, CEO must submit a report to the State Treasurer and the State
Controller summarizing the status of the loans made to utilities that originated from the
Unclaimed Property Trust Fund.
If state revenue subject to TABOR is forecasted to be at least $50 million below the
Referendum C cap in either FY 2025-26 or FY 2026-27, the bill transfers no money from the
Unclaimed Property Trust Fund. Instead, the Department of the Treasury will sell insurance
premium tax credits to insurance companies to generate $25 million in that year, which is
subsequently transferred to the On-Bill Cash Fund.
House Bill 25-1269 creates the Building Decarbonization Enterprise in the Colorado Energy
Office. If that bill is enacted, this bill requires the enterprise to support the On-Bill Program. A
participating utility must pay an annual administration fee to the enterprise throughout the life
of the loan, at a level that depends on the amount it borrows from the On-Bill Program. The
enterprise provides technical assistance to the utility for on-bill program models, meeting
reporting obligations, program administration, and consumer education.
Background
The Unclaimed Property Division of the State Treasury holds, in perpetuity or until claimed, lost
or forgotten assets of individuals and businesses in Colorado. The Unclaimed Property Trust
Fund consists of all moneys collected under the Unclaimed Property Act, and interest earned on
the account. The Unclaimed Property Trust Fund is TABOR-exempt; however, transfers out of the
fund are generally subject to TABOR. Page 4
April 18, 2025 HB 25-1268
Assumptions
The bill makes $50 million available for financing energy efficiency and electrification measures
through utilities, before paying for CEO’s administrative costs. The fiscal note assumes that CEO
will issue $40 million in loans over two years, leaving $10 million for future loans and
administrative costs. This is for illustrative purposes only; actual program expenditures will
depend on the number of participating utilities and demand from utility customers.
State Revenue
The bill increases revenue from interest earned on the On-Bill Cash Fund and fees on utilities
credited to the On-Bill Program Administration Cash Fund, and it decreases revenue from
foregone interest earnings in the Unclaimed Property Trust Fund, resulting in a net reduction of
$320,000 in FY 2025-26, and $520,000 in FY 2026-27 and ongoing. Interest revenue is subject to
TABOR; other revenue is not subject to TABOR. The bill may decrease net revenue from
insurance premium taxes and it may increase revenue from gifts, grants, or donations. These
impacts are discussed below.
Interest Earnings
CEO uses the On-Bill Cash Fund to make loans to utilities. The agency’s expenditures from the
fund will depend on the extent to which utilities create or expand on-bill programs, and
programmatic decisions made by CEO. Interest earned on the cash fund is subject to TABOR.
Based on the assumptions above, this is estimated to be about $140,000 in FY 2025-26 and
$290,000 in FY 2026-27. Interest earnings on the On-Bill Program Administration Cash Fund are
expected to be minimal.
Fee Impact on Participating Utilities
Colorado law requires legislative service agency review of measures which create or increase any
fee collected by a state agency. These fee amounts are estimates only, actual fees will be set
administratively by the Building Decarbonization Enterprise based on cash fund balance,
program costs, the fee limits in the bill, and the amount of money that a utility borrows from the
On-Bill Program. Table 2A identifies the fee impact of this bill on utilities, and Table 2B estimates
the total revenue generated based on the assumptions above.
Page 5
April 18, 2025 HB 25-1268
Table 2A
Fee Impact on Participating Utilities
Borrowed Amount Annual Fee Amount
up to $10 million up to $50,000
$10 million to $20 million $50,000 to $75,000
$20 million to $40 million $75,000 to $100,000
$40 million to $60 million $100,000 to 200,000
$60 million to $80 million $200,000 to $300,000
more than $80 million $300,000 to $400,000
Table 2B
Estimated Fee Revenue
Fiscal Year Total Amount Loaned Fee Revenue
FY 2025-26 $20.0 million $87,500
FY 2026-27 $40.0 million $150,000
Interest on the Unclaimed Property Trust Fund
The bill reduces interest revenue earned on the Unclaimed Property Trust Fund. The amount of
revenue depends on interest rates and other changes to the fund’s balance. Assuming a
3 percent annual interest rate, the amount of revenue lost is estimated at $750,000 in
FY 2025-26 and $1.5 million in FY 2026-27. Over the 20-year lifespan of the loan, the total
revenue lost is an estimated $40.9 million. This assumes that the 1 percent interest earned on
the loans to utilities will cover administrative costs. If the interest payments exceed
administrative costs, they will partially offset this revenue loss. Interest earned on money in the
Unclaimed Property Trust Fund is not subject to TABOR.
On-Bill Financing Tax Credits
The bill may increase revenue from the sale of on-bill tax credits to insurance companies by at
least $25 million per year in FY 2025-26 and FY 2026-27, with a corresponding decrease in
revenue from insurance premium taxes. The Treasury determines the value of the insurance
premium tax credits purchased by insurance companies and the tax years for which the credits
may be claimed. The bill establishes a default credit value of 133% the amount paid; this
amounts to $33.3 million in tax credits for each $25 million in proceeds for a net revenue
decrease of $8.8 million over multiple years, depending on when the tax credits may be claimed.
The revenue increase from the sale of tax credits accrues to the On-Bill Cash Fund. The
revenue decrease from the claiming of the tax credits occurs in the General Fund. Based on the
March 2025 LCS economic forecast, the conditions for selling the tax credits are not expected to
occur and the fiscal note assumes that the on-bill program will be financed from the Unclaimed
Property Trust Fund. Page 6
April 18, 2025 HB 25-1268
Gifts, Grants, and Donations
The bill potentially increases state revenue to the On-Bill Administration Cash Fund or the
Building Decarbonization Enterprise Cash Fund from gifts, grants, or donations; however, no
sources have been identified at this time. Gifts, grants, and donations are exempt from TABOR.
State Loans
Unless the conditions for selling insurance premium tax credits are met, the bill makes the
following transfers from the Unclaimed Property Trust Fund to the On-Bill Cash Fund:
$5 million on July 1, 2025;
$20 million on March 1, 2026; and
$25 million on July 1, 2026.
These transfers are in the form of interest-free loans from the Unclaimed Property Trust Fund to
the State Utility On-Bill Repayment Program Cash Fund. The loans must generally be repaid in
20 years.
State Expenditures
Excluding loans issued through the new program, the bill increases state expenditures in the
Colorado Energy Office by about $240,000 in FY 2025-26 and $180,000 in FY 2026-27. It is
assumed that around $20.0 million in loans will be issued annually over a two-year period. Costs
in CEO, paid from the On-Bill Cash Fund and the On-Bill Program Administration Cash Fund, are
summarized in Table 3 and discussed below. The bill also minimally affects workload in the
Department of Regulatory Agencies and may affect workload in the Department of the Treasury.
Table 3
State Expenditures
Colorado Energy Office
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Personal Services $90,251 $147,626
Operating Expenses $1,024 $1,664
Capital Outlay Costs $6,670 $0
Financing Loans $20,000,000 $20,000,000
Program Administrator $119,164 $119,164
Centrally Appropriated Costs $17.916 $29,071
Total Costs $20,235,025 $20,178,361
Total FTE 0.8 FTE 1.3 FTE
Page 7
April 18, 2025 HB 25-1268
Colorado Energy Office
The office will have staff and contracting costs beginning in FY 2025-26 to implement the bill.
Staff
CEO requires 0.2 FTE staff beginning in FY 2025-26 to contract and liaise with an administrator
for the new program. In addition, the bill increases workload in the enterprise to offer technical
assistance. This is estimated at 1.1 FTE beginning in FY 2025-26. Standard operating and capital
outlay costs are included. The fiscal note prorates the enterprise’s costs in the first year for a
January 1 start date.
Financing for Energy Efficiency or Electrification Measures
The fiscal note assumes CEO will make loans to utilities to finance energy efficiency or
electrification measures over multiple years. Actual expenditures will depend on demand from
participating utilities and utility customers.
Program Administrator
Based on the assumptions above and the amount of revenue available for administrative costs,
the fiscal note estimates that CEO will pay administrative fees to a third-party program
administer of about $120,000 per year over the life of the program.
Department of Regulatory Agencies
Requiring participating utilities to include an application with the Public Utilities Commission
increases workload to conduct a new regulatory proceeding, likely in FY 2027-28. This can be
accomplished within existing appropriations.
Department of the Treasury
If the bill results in the sale of insurance premium tax credits, it increases workload in the
Treasury to establish the terms of the sale and to collect the proceeds. This workload is expected
to be accomplished within existing appropriations.
Centrally Appropriated Costs
Pursuant to a Joint Budget Committee policy, certain costs associated with this bill are
addressed through the annual budget process and centrally appropriated in the Long Bill or
supplemental appropriations bills, rather than in this bill. These costs, which may include
employee insurance, supplemental employee retirement payments, leased space, and indirect
cost assessments, are shown in the expenditure table above. Page 8
April 18, 2025 HB 25-1268
TABOR Refunds
Funds in the Unclaimed Property Trust Fund are exempt from TABOR, but may become subject
to TABOR when transferred to other funds to be used for governmental purposes. If CEO is
unable to repay the loan in full, any unpaid balance will constitute a transfer to a state cash fund
and that amount will count against the state’s TABOR limit in FY 2045-46.
Although the revenue generated by the sale of insurance premium tax credits is subject to
TABOR, it only occurs if revenue is projected be below the Referendum C cap and there is no
impact on TABOR refunds. Those credits may be claimed in future years, as determined by the
State Treasurer at the time of the sale. This may result in a decrease in TABOR refunds for those
years.
Technical Note
The bill requires a loan made by CEO to a utility to include 1 percent interest payments to the
Unclaimed Property Trust Fund, regardless of the source of funds for the loan. If the loans
instead originate as proceeds from the sale of insurance premium tax credits, the fiscal note
assumes that interest payments to the Unclaimed Property Trust Fund are not required.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
State and Local Government Contacts
Colorado Energy Office
Law
Personnel
Regulatory Agencies
Treasury
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.