SB 25-182
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
SB 25-182: EMBODIED CARBON REDUCTION
Prime Sponsors:
Sen. Ball
Rep. Brown
Published for: Senate Appropriations
Drafting number: LLS 25-0872
Fiscal Analyst:
Amanda Liddle, 303-866-5834
amanda.liddle@coleg.gov
Version: Second Revised Note
Date: April 2, 2025
Fiscal note status: This revised fiscal note reflects the introduced bill, as amended by the Senate
Transportation and Energy Committee. It has been updated to reflect new information.
Summary Information
Overview. The bill adds embodied carbon improvements to the Industrial Clean Energy Tax Credit and
the list of energy improvements eligible for funding by the Colorado New Energy Improvement District.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
Minimal State Workload Local Government
Appropriations. No appropriation is required.
Table 1
State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue $0 $0
State Expenditures $0 $0
Transferred Funds $0 $0
Change in TABOR Refunds $0 $0
Change in State FTE 0.0 FTE 0.0 FTE
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April 2, 2025 SB 25-182
Summary of Legislation
The bill defines an “embodied carbon improvement” as an installation or modification to real
property using asphalt and asphalt mixtures, cement and concrete mixtures, and steel that
results in the reduction of the installation’s or modification’s embodied emissions, as established
by policies created by the Colorado Energy Office (CEO) in consultation with the Office of the
State Architect.
The bill adds embodied carbon improvements to the list of new energy improvements for which
the Colorado New Energy Improvement District may provide financing.
Beginning in the 2026 tax year, the bill adds embodied carbon investments—which are
investments in the production of asphalt and asphalt mixtures, cement and concrete mixtures,
and steel that result in the reduction of the material’s embodied emissions—to the list of
greenhouse gas reduction improvements that may qualify for the Industrial Clean Energy Tax
Credit. To qualify, an investment must result in a 15 percent or greater reduction in the
material’s embodied emissions compared to the material’s baseline as established by the CEO in
consultation with the Office of the State Architect. The measurement of embodied emissions
considers the life cycle stages for a product such as raw material extraction and processing,
transport to the manufacturer, manufacturing, and others stages.
Background
Colorado New Energy Improvement District
The Colorado New Energy Improvement District is a special district that was established in the
New Energy Jobs Creation Act of 2010 (House Bill 10-1328). The district administers the
Colorado Commercial Property Assessed Clean Energy (C-PACE) Program, which provides
financing for new energy improvements to eligible commercial and industrial buildings.
Financing provided by the C-PACE program is repaid through the county property tax
assessment process. A voluntary assessment is placed on the building owner’s property tax bill
to repay the provided funds over a payment period of up to 25 years. New energy
improvements include installations or modifications that reduce the energy consumption of the
property or add energy produced from renewable energy sources.
Industrial Clean Energy Tax Credit
The Industrial Clean Energy Tax Credit—also referred to as the Colorado Industrial Tax Credit
Offering (CITCO)—is a refundable state income tax credit created by House Bill 23-1272. The tax
credit is administered by the CEO and may be claimed for tax years 2024 through 2032. The
credit is equal to 30 percent of qualifying expenditures by an owner of an industrial facility to
undertake an industrial emissions study or between 30 percent and 50 percent of qualifying
expenditures to implement greenhouse gas emissions reduction improvements. The aggregate
amount of the credit is limited to $16 million for tax years 2024 through 2028 and to $24 million Page 3
April 2, 2025 SB 25-182
for tax years 2029 through 2032. Individual tax credit reservations for industrial emissions
studies must not exceed $1 million; individual credits for greenhouse gas emissions reduction
improvements must range between $75,000 and $8 million.
Organizations that receive an Enterprise Zone Tax Credit or a Clean Air Program grant may not
receive a CITCO Tax Credit.
For FY 2024-25, costs to administer the tax credit are paid by the continuously appropriated
Industrial Manufacturing Operations Clean Air Grant Program Cash Fund. For FY 2025-26
through FY 2033-34, funds for administrative costs will be annually appropriated from the
Decarbonization Tax Credit Administration Cash Fund, which receives severance tax revenue
generated from temporary cuts to the severance tax ad valorem tax credit enacted in
HB 23-1272.
State Revenue
The bill is not expected to impact state revenue. The expansion of the CITCO may result in more
applications for the tax credit, making reservations for the tax credit more competitive. However,
the aggregate maximum credit amount is already expected to be reached each year under
current law; therefore, the expansion of the CITCO to include embodied carbon improvements
will not cause further reductions to state revenue than have already been estimated and
accounted for through the fiscal note for HB 23-1272.
State Expenditures
The bill minimally increases workload in the Colorado Energy Office, Department of Revenue,
and Office of the State Architect.
Colorado Energy Office
The office administers the CITCO and will be responsible for overseeing the development and
implementation of embodied carbon reduction considerations, including coordination with the
agency’s CITCO contractor to develop embodied carbon reduction-related calculation
methodologies to ensure a minimum 15 percent embodied carbon reduction is occurring when
compared to usual material manufacturing. In addition, the incorporation of embodied carbon
reduction into eligible project types will likely result in an increase in tax credit applications.
Because the office will consult with the Office of State Architect and build from the Rocky
Mountain Institute’s pilot program for embodied carbon reductions for the establishment of
standards and guidelines, the increased workload is expected to be absorbable within existing
appropriations.
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April 2, 2025 SB 25-182
Department of Revenue
The bill may increase workload within the Department of Revenue to the extent that the
expansion of the CITCO tax credit creates more reservations of the credit. Because additional
reservations are expected to be minimal, any additional work is correspondingly expected to be
minimal and can be accomplished within existing appropriations.
Department of Personnel and Administration
The Office of the State Architect within the Department of Personnel and Administration will
have a minimal increase in workload to support the Colorado Energy Office in establishing
standards and guidelines for embodied carbon reductions eligible for the CITCO tax credit. This
consultation can be accomplished within existing appropriations.
Local Government
The C-PACE Program within the Colorado New Energy Improvement District may see increased
expenditures and revenue to the extent that building owners conducting embodied carbon
improvements apply for financing through the program.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State and Local Government Contacts
Colorado Energy Office
Information Technology
Revenue
Personnel
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.