Implement State Climate Goals

Section 1 of the bill creates the office of sustainability in the department of personnel (department). The office of sustainability is required to work with state agencies and institutions of higher education to implement environmentally sustainable practices. The powers, duties, and functions of the office of sustainability include:

• Providing leadership to and requiring accountability from state agencies regarding ongoing sustainability initiatives;
• Developing baseline metrics and goals for reduction of negative environmental impacts and tracking state agencies' performance in achieving the goals;
• Tracking the amount of money the state saves as a result of implementing sustainable practices;
• Seeking and applying for federal funding and other grant opportunities that would support sustainable practices within state agencies;
• Assisting state agencies in implementing sustainable procurement methods and introducing options for environmentally preferable products or services to state agencies;
• Assisting state agencies in installing energy-efficient equipment and fixtures;
• Assisting state agencies in meeting building performance standards such as those administered by the Colorado energy office;
• Coordinating and assisting in planning and constructing state agencies' electric vehicle charging infrastructure and ensuring utilization of such infrastructure;
• Instituting water reduction initiatives, including but not limited to the installation of water-conserving fixtures and water-wise plants on state property; the conversion of nonnative grasses to xeriscape; and the reduction of nonfunctional turf and encouragement of water-efficient sustainable landscaping practices at state facilities;
• Assisting state agencies in transitioning from gas-powered to electric equipment;
• Implementing statewide waste diversion practices to increase state agencies' recycling rates;
• Developing commuting opportunities for state employees that reduce greenhouse gas emissions and other pollution;
• Assisting state agencies in developing training programs to educate state employees on sustainable practices; and
• Conducting other activities as directed by the general assembly or the governor.

The bill creates the state agency sustainability revolving fund (revolving fund) and directs the state treasurer to transfer $540,230 $400,000 from the general fund to the revolving fund. The bill specifies that the office of sustainability may use the money in the revolving fund for the purposes of operating the office and replacing the state's gas- and diesel-powered equipment located in ozone nonattainment areas as designated by the U.S. environmental protection agency.

In addition, the bill requires the office of sustainability to review and coordinate state agencies' applications for elective pay funding available under the federal "Inflation Reduction Act of 2022" (act), and to work with the office of the state controller to coordinate central submissions of elective pay applications by advising and assisting state agencies in submitting and centrally filing those applications and by providing technical assistance to state agencies on elective pay.

The bill also creates the inflation reduction act elective pay cash fund (cash fund), which consists of money received by the department pursuant to the elective pay provisions of the act, all of which must be deposited into the cash fund to be used for the purposes of the office.

Section 2 specifies that the office of sustainability is a type 2 entity under the administrative organization act. Section 3 makes a conforming change to clarify that a provision requiring the state treasurer to repay costs associated with administering the decarbonization tax credits to certain cash funds has been moved to a new section. Section 4 makes several clarifications regarding the geothermal energy grant program (grant program), including specifying that:

• The grant program applies to both heating-only and combined heating and cooling systems;
• At least 25% of the grant money must be awarded to eligible entities from or projects in low-income, disproportionately impacted, or just transition communities; and
• The Colorado energy office may utilize grant program money to support education, outreach, and engagement with the general public and relevant stakeholders to facilitate the growth of the geothermal sector and awareness of relevant state programs in Colorado.

Section 5 specifies that money in the decarbonization tax credits administration cash fund may be used to repay administrative costs associated with administering the decarbonization tax credits to certain cash funds, and that all such administrative costs must be repaid to the cash funds on or before June 29, 2024. The amount remaining in the fund on June 30 of each year is increased to $300,000. Section 4 6 extends the deadline for the energy code board to develop a model low energy and carbon code and specifies that the model low energy and carbon code can include appendices and resources to the international energy conservation code. Section 5 7 decreases the amount of money the Colorado energy office can issue in grants to local governments to support their adoption and enforcement of the 2021 international energy conservation code, an electric ready and solar ready code, and a low energy and carbon code by $125,000 and increases the amount the treasurer is required to transfer into the energy fund to $275,000. Section 8 specifies that grantees may use money received through the high-efficiency electric heating and appliances grant program for equipment used to dry clothes and for other purposes as determined by the department. Section 9 and section 10 make conforming changes to clarify that a provision requiring the state treasurer to repay costs associated with administering the decarbonization tax credits to certain cash funds has been moved to a new section. Section 6 11 clarifies that, for purposes of the industrial clean energy tax credit, an industrial study includes a pre-front-end or front-end engineering design study that meets or exceeds the standards established by the Colorado energy office or any other industrial studies as outlined in program standards, and that an owner includes a project developer. Section 6 11 also increases the amount of the credit that can be claimed to $8 million, and specifies that an owner that claims the industrial clean energy tax credit cannot, for the same greenhouse gas emission reduction improvements, claim the enterprise zone investment tax credit or receive grant money under the industrial and manufacturing operations clean air grant program. Section 7 12 clarifies several definitions related to the tax credit for expenditures made in connection with a geothermal energy project and adds several definitions. Section 7 also adds tribal governments as eligible taxpayers pursuant to the tax credit. Section 8 13 adds tribal governments as qualified entities pursuant to the geothermal electricity generation production tax credit, and requires the Colorado energy office to annually review and evaluate the effectiveness of the tax credit. Section 9 clarifies the definition of "air-source heat pump system" pursuant to the heat pump technology and thermal energy network tax credit and allows the Colorado energy office to review and modify more credit amounts and create certificate maximums related to the heat pump technology and thermal energy network tax credit. Section 10 14 clarifies that certain provisions related to the clean hydrogen tax credit are subject to rules adopted by the public utilities commission. Section 11 advances the deadline by which the treasurer must repay all administrative costs to the industrial and manufacturing operations clean air grant program cash fund, the geothermal energy grant fund, the community access to electric bicycles cash fund, and the electrifying school buses grant program cash fund to June 30, 2024. Section 15 repeals a provision which required the state treasurer to credit an amount of severance taxes to certain cash funds to repay costs associated with administering the decarbonization tax credits. Section 16 extends the date by which the public utilities commission must determine mass-based greenhouse gas emission reduction targets for clean heat plans for 2035. Section 17 specifies that an appropriation made to the department of higher education and related to the biochar in oil and gas well plugging working advisory group is further appropriated to the department if it is not expended prior to July 1, 2024. Sections 18 and 19 make appropriations to the department of revenue, the Colorado energy office, and the governor's office. in order to implement the bill.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)