HB 25-1269
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1269: BUILDING DECARBONIZATION MEA SURES
Prime Sponsors:
Rep. Willford; Valdez
Sen. Ball; Kipp
Published for: House Energy & Environment
Drafting number: LLS 25-0849
Fiscal Analyst:
Matt Bishop, 303-866-4796
matt.bishop@coleg.gov
Version: Initial Fiscal Note
Date: February 28, 2025
Fiscal note status: The fiscal note reflects the introduced bill.
Summary Information
Overview. The bill establishes building performance standards for 2040 and creates a new state
enterprise to support building decarbonization efforts.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
State Revenue
State Expenditures
Local Governments
School Districts
Appropriations. No appropriation is required.
Table 1
State Fiscal Impacts
Type of Impact
1
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Out Year
FY 2028-29
State Revenue $0 $2,656,000 $3,419,600 $3,419,600
State Expenditures $0 $2,656,000 $3,419,600 $3,539,966
Transferred Funds $0 $0 $0 $0
Change in TABOR Refunds $0 $0 $0 $0
Change in State FTE 0.0 FTE 1.5 FTE 1.5 FTE 2.0 FTE
1
Fund sources for these impacts are shown in the tables below. Page 2
February 28, 2025 HB 25-1269
Table 1A
State Revenue
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Out Year
FY 2028-29
General Fund $0 $0 $0 $0
Cash Funds $0 $2,656,000 $3,419,600 $3,419,600
Total Revenue $0 $2,656,000 $3,419,600 $3,419,600
Table 1B
State Expenditures
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Out Year
FY 2028-29
General Fund $0 $0 $0 $120,366
Cash Funds $0 $2,623,847 $3,387,447 $3,387,447
Federal Funds $0 $0 $0 $0
Centrally Appropriated $0 $32,153 $32,153 $32,153
Total Expenditures $0 $2,656,000 $3,419,600 $3,539,966
Total FTE 0.0 FTE 1.5 FTE 1.5 FTE 2.0 FTE
Summary of Legislation
Building Decarbonization Enterprise
The bill creates the Building Decarbonization Enterprise in the Colorado Energy Office (CEO) to
provide technical assistance, financing, and other programmatic support for building
decarbonization measures, such as energy audits, consulting services, and energy use tracking
software. Covered building owners must pay a $400 fee to the enterprise beginning in
FY 2026-27. The fee is set in the bill and will increase with inflation.
Building Performance Standards
Under current law, certain building owners must submit energy usage benchmarking data to the
Colorado Energy Office (CEO). The bill delays the annual reporting deadline by five months and
specifies that, if the owner lacks access to the data, the building operator must submit the report
instead.
The Air Quality Control Commission in the Department of Public Health and Environment
(CDPHE) must adopt rules to develop 2040 performance standards for buildings. The
department must propose standards by March 31, 2029, in consultation with a task force that
meets during FY 2027-28. Page 3
February 28, 2025 HB 25-1269
The bill specifies the following process through 2030 for tracking and meeting emissions
reduction targets for covered buildings:
submitting 2019 benchmarking data by January 1, 2026;
achieving a 13 percent energy use reduction by 2026 compared to 2019; and
achieving a 29 percent energy use reduction by 2030 compared to 2019.
Alternately, a building owner may track its progress toward meeting the performance standards
and seek technical support from CEO. The bill also expands CDPHE’s authority to issue civil
penalties for violations of the benchmarking requirements.
Wildfire Resiliency Codes
When a local government adopts a wildfire resiliency code, the bill exempts it from adopting
certain energy codes.
State Revenue
Fee Impact on Covered Building Owners
Colorado law requires legislative service agency review of measures which create or increase any
fee collected by a state agency. The fee is set by the bill at $400 for FY 2026-27, and it increases
with inflation in subsequent years. The fiscal note estimates that there are 8,300 buildings
covered by the fee, and that compliance will phase in over two years. Revenue collected by the
enterprise is not subject to TABOR. The table below identifies the fee impact of this bill.
Table 2
Fee Impact on Covered Building Owners
Fiscal Year Type of Fee Estimated Fee
Number
Affected
Total
Fee Impact
FY 2025-26 No fee $0 0 $0
FY 2026-27 Decarbonization Fee $400 6,640 $2,656,000
FY 2027-28 Decarbonization Fee $412 8,300 $3,419,600
State Expenditures
The bill increases state expenditures by about $25,000 in FY 2025-26, $2.7 million in FY 2026-27,
$3.4 million in FY 2026-27and X in FY 2027-28, and $3.5 million in FY 2028-29. These costs will
be incurred in the Colorado Energy Office and the Department of Public Health and
Environment as shown in Tables 3 through 3B and described in the sections below. Costs are
paid from the General Fund and the Building Decarbonization Enterprise Cash Fund. Page 4
February 28, 2025 HB 25-1269
Table 3
State Expenditures
All Departments
Department
Budget Year
FY 2025-26
Budget Year
FY 2026-27
Out Year
FY 2027-28
Out Year
FY 2028-29
Colorado Energy Office $0 $2,656,000 $3,419,600 $3,419,600
Department of Public Health $0 $0 $0 $120,366
Total Costs $0 $2,656,000 $3,419,600 $3,539,966
Colorado Energy Office
The bill increases expenditures to operate the new enterprise beginning in FY 2026-27. Based on
the assumptions above, spending by the enterprise will increase in subsequent years as fee
revenue increases.
Staff
CEO requires 1.3 FTE beginning in FY 2026-27 to support rulemaking, conduct planning, engage
stakeholders, and develop the decarbonization program. This includes staff for administrative
support. Standard operating and capital outlay costs are included.
Decarbonization Activities
The fiscal note estimates the amount of funding available for decarbonization activities in
support of covered building owners beginning in FY 2026-27 based on the revenue assumptions
above.
Indirect Cost Assessment
The enterprise will incur additional costs from indirect support from CEO, including leased space
and additional operating costs. CEO’s indirect cost rate is projected to be 43.6 percent of the
enterprise’s administrative costs, excluding decarbonization activities.
Planning Costs
The enterprise will incur about $75,000 in planning costs to develop the new programs in
FY 2026-27 only. This includes stakeholder engagement, budget development, and developing
metrics for program performance.
Legal Services
The enterprise requires 400 hours of legal services per year beginning in FY 2026-27 for
rulemaking and ongoing general counsel. Legal services are provided by the Department of Law
at a rate of $133.74 per hour. Page 5
February 28, 2025 HB 25-1269
Table 3A
State Expenditures
Colorado Energy Office
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Out Year
FY 2028-29
Personal Services $0 $158,708 $158,708 $158,708
Operating Expenses $0 $1,792 $1,792 $1,792
Capital Outlay Costs $0 $6,670 $0 $0
Decarbonization Activities $0 $2,250,295 $3,098,473 $3,098,473
Planning Costs $0 $75,000 $0 $0
Indirect Cost Assessment $0 $72,886 $69,978 $69,978
Legal Services $0 $53,496 $53,496 $53,496
Board Costs $0 $5,000 $5,000 $5,000
Centrally Appropriated Costs $0 $32,153 $32,153 $32,153
FTE – Personal Services 0.0 FTE 1.3 FTE 1.3 FTE 1.3 FTE
FTE – Legal Services 0.0 FTE 0.2 FTE 0.2 FTE 0.2 FTE
Total Costs $0 $2,656,000 $3,419,600 $3,419,600
Total FTE 0.0 FTE 1.5 FTE 1.5 FTE 1.5 FTE
Department of Public Health and Environment
The bill increases expenditures in CDPHE to conduct rulemaking. This begins with legal review
and research in FY 2025-26, followed by rulemaking proceedings in FY 2027-28. Rulemaking is
expected to require an estimated 900 hours in FY 2027-28. This fiscal note assumes any increase
workload for legal review can be accomplished within existing appropriations. Legal services are
provided by the Department of Law at a rate of $133.74 per hour. These costs are paid from the
General Fund.
Table 3A
State Expenditures
Department of Public Health and Environment
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Out Year
FY 2028-29
Legal Services $0 $0 $0 $120,366
Total Costs $0 $0 $0 $120,366
Total FTE – Legal Services 0.0 FTE 0.0 FTE 0.0 FTE 0.5 FTE Page 6
February 28, 2025 HB 25-1269
Judicial Department
Compliance decisions made by CEO or CDPHE are subject to judicial review, which may increase
workload in the trial courts. Any increase in cases is expected to be minimal and no change in
appropriations is required.
Governor’s Office of Boards and Commissions
Workload will minimally increase for the Governor’s Office of Boards and Commissions to make
the required appointment under the bill. This work can 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 include employee
insurance and supplemental employee retirement payments, are shown in the expenditure
tables above.
Local Government – School District
The bill increases expenditures for any local government or school district that owns a building
covered by the enterprise fee.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature, and it applies to conduct occurring on or after that date.
State and Local Government Contacts
Colorado Energy Office
Counties
Governor's Office
Judicial
Law
Municipalities
Personnel
Public Health and Environment
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.