8 CCR 1501-13 – Regulation 1 - Building Decarbonization Enterprise

OFFICE OF THE GOVERNOR Colorado Energy Office REGULATION 1 – BUILDING DECARBONIZATION FEE 8 CCR 1501-13 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] 1.1 AUTHORITY AND PURPOSE 1.1.1 Authority The Building Decarbonization Enterprise Board (the “Board”) shall administer the Building Decarbonization Cash Fund (the “Fund”) pursuant to § 24-38.5-125, C.R.S. The Fund consists of:

1.1.1.1 Building Decarbonization fee revenue;

1.1.1.2 Monetary gifts, grants, donations, or other payments received by the Building Decarbonization Enterprise;

1.1.1.3 Any money received from the issuance of revenue bonds; and 1.1.1.4 Any other money that the general assembly may appropriate or transfer to the Fund.

1.1.2 Purpose 1.1.2.1 Pursuant to § 24-38.5-125(3)(a), C.R.S., the Board is authorized to: (a) Impose and assess a building decarbonization fee on owners of covered buildings;

(b) Provide technical assistance, financing, and other programmatic support for covered building owners' building decarbonization measures, including, but not limited to, conducting building energy audits, developing analyses to help building owners evaluate the best strategies for achieving future performance standard targets, consulting building engineers, purchasing energy use tracking software, and providing training on such software;

(c) Have and exercise all rights and powers necessary or incidental to or implied from the specific powers and duties granted under this section; and 1 CODE OF COLORADO REGULATIONS 8 CCR 1501-13 Colorado Energy Office (d) Ensure that the building decarbonization fee paid by covered building owners is used solely to support programs, technical assistance, and financial assistance for the covered building owners that pay the building decarbonization fee.

1.1.3 Definitions 1.1.3.1 ‘Board’ means the governing board of the Building Decarbonization Enterprise as defined in § 24-38.5-125(4), C.R.S.

1.1.3.2 ‘Building Decarbonization Fee’ or ‘fee’ means the fee paid by the owner of a covered building.

1.1.3.3 “Covered building” means a building comprising a gross floor area of fifty thousand square feet or more that is occupied by a single occupant or group of tenants. “Covered building” does not include: (A) A storage facility, stand-alone parking garage, or airplane hangar that lacks heating and cooling;

(B) A building in which more than half of the gross floor area is used for manufacturing or industrial purposes;

1.1.3.4 ‘Enterprise’ means the Building Decarbonization Enterprise created in § 24-38.5-125(3), C.R.S.

1.1.3.5 ‘Fund’ means the Building Decarbonization Cash Fund created within the state treasury pursuant to § 24-38.5-125(6)(a), C.R.S. 1.1.3.6 “Inflation” means the annual percentage change in the in the United States department of labor's bureau of labor statistics consumer price index, or a successor index, for Denver-Aurora-Lakewood for all items paid for by urban consumers 1.1.3.7 “Office” means the Colorado Energy Office created in § 24-38.5- 101, C.R.S.

1.1.4 Severability Each provision of this regulation shall be deemed severable, and in the event that any provision of this regulation is held to be invalid, the remainder of this regulation shall continue in full force and effect.

2 CODE OF COLORADO REGULATIONS 8 CCR 1501-13 Colorado Energy Office 1.2 BUILDING DECARBONIZATION FEE The fee, as established by the Board, will be collected for the specific business purposes of providing financing and technical assistance to covered building owners to more effectively and efficiently implement building decarbonization measures, including feasibility analyses and improvements that will reduce energy use and emissions. The fee is to be collected at a rate that is reasonably related to the overall cost of the business services being provided. The Board shall impose, and the Colorado Energy Office shall collect on behalf of the Enterprise, the fee. 1.2.1 The fee shall be set at $400 as authorized by § 24-38.5-125(5), C.R.S. 1.2.1.1 The fee shall be adjusted for inflation on an annual basis starting in fiscal year 2027-2028.

1.2.2 The fee shall be collected by the Colorado Energy Office on behalf of the Enterprise annually on November 1st.

1.3 OTHER REVENUES, PAYMENTS, GRANTS, GIFTS AND DONATIONS 1.3.1 Nothing in this rule limits or precludes the Fund from receiving other revenues, payments, grants, gifts and donations as allowed by § 24-38.5-125(1)(b), C.R.S. or other statute.

2.1 STATEMENT OF BASIS AND PURPOSE 2.1.1. Basis and Purpose Pursuant to § 24-38.5-123(3) C.R.S., the Enterprise functions as a government-owned business that provides statutorily specified services to fee payers, specifically, owners of covered buildings. Expenditures of Enterprise revenue will provide benefits to fee payers, and may also benefit the public and third parties. To minimize the administrative costs associated with the fee rule to further the purposes and mission of the Enterprise, the Colorado Energy Office shall collect the building decarbonization fee on behalf of the Enterprise. Statute mandated that the Enterprise begin collecting the fee in state fiscal year 2026 and the Board adopt rules for the purpose of setting the amount of the building decarbonization fee in furtherance of the Enterprise's business purpose.

3 CODE OF COLORADO REGULATIONS 8 CCR 1501-13 Colorado Energy Office Statute also requires the fee be imposed upon all covered building owners; except that the fee shall not be imposed on the owner of a public building. “Public building” has the same definition as established in § 25-7-142(2)(t), C.R.S., means a covered building owned by:

(I) The state;

(II) A local government;

(III) A district or special district regulated under title 32; (IV) A state institution of higher education;

(V) A private institution of higher education as defined in § 23-18-102(9), C.R.S.;

(VI) A school district created pursuant to article 30 of title 22; and (VII) A charter school authorized pursuant to part 1 of article 30.5 of title 22. Statutory Authority To fund its activities, the Board must establish fees, as authorized in § 24-38.5- 125(5)(b), C.R.S. This rule sets up the permanent building decarbonization fee that will be paid into the Fund.

It is appropriate that covered building owners should pay a building decarbonization fee, as covered building owners are the direct beneficiaries of services provided by the Enterprise, which services include the financing and technical assistance provided for the building decarbonization measures.

Other revenues, payments, grants, gifts and donations Payment into the Fund may also occur through the receipt of other revenues, payments, gifts, grants, and donations.

Future fee revisions The Board, with assistance from the department of revenue, will revisit the building decarbonization enterprise fee annually to adjust the fee for inflation. 4 CODE OF COLORADO REGULATIONS 8 CCR 1501-13 Colorado Energy Office ______________________________________________________________________ Editor’s Notes History New rule emer. rule eff. 10/13/2025.

Rules 1.1.1, 1.1.2.1, 1.1.3.7, 1.2.2, 2.1.1 eff. 03/17/2026. 5