Repeal Decarbonization Tax Credits Administration Fund

Colorado ends dedicated tax credit administration fund

The law makes these changes contingent on House Bill 26-1405 becoming law. Beginning July 1, 2027, it repeals Colorado’s dedicated fund for running decarbonization tax credits. Money left in the fund that is neither spent nor committed moves to the general fund on June 30, 2027. For state budget years 2027-28 through 2034-35, lawmakers may approve money for the Colorado Energy Office and Department of Revenue. That money can cover direct and indirect costs of running the credits; the law sets no funding amount. It does not change household tax credit amounts or who qualifies. For budget years 2023-24 and 2024-25, other established funds retain limited authority to cover administration costs. These cover industrial clean energy, sustainable aviation fuel facilities, geothermal projects and electricity, heat pumps, thermal energy networks, and electric bicycles. The school bus fund can also cover motor vehicle credits and the ownership-tax reduction for electric medium- and heavy-duty fleet trucks. Agencies must keep accounts, but the earlier cost-repayment mechanism is removed. The law also repeals the energy and carbon management fund’s transfer provision, with a stated repeal date of July 1, 2026. It ends the severance-tax revenue route to the administration fund, with the repealed provisions removed by December 31, 2036.