Section 24-38.5-116 - Industrial and manufacturing operations clean air grant program - creation - eligibility - fund created - gifts, grants, or donations - transfer - legislative declaration - definitions - reporting - repeal(1)Legislative declaration. The general assembly hereby finds and declares that: (a) The industrial and manufacturing sector is one of the five largest sources of greenhouse gas pollution in the state;(b) Industrial emissions often:(I) Disproportionately impact low-income, minority, or housing cost-burdened communities in the state; and(II) Contain hazardous air pollutants that cause or exacerbate existing health conditions, which, in turn, contribute further to the existing economic disparity between the disproportionately impacted communities and other communities of the state; and(c) While state and federal regulation of industrial air pollution, including pollution from greenhouse gases, is essential for public health and for achieving state climate goals and addressing ozone nonattainment, voluntary actions are needed to achieve further reductions in industrial pollution.(2)Definitions. As used in this section, unless the context otherwise requires: (a) "Air pollutant": (I) Has the meaning set forth in section 25-7-103 (1.5); and(II) Includes air toxics, particulates, ozone precursors, and greenhouse gases.(b) "Disproportionately impacted community" has the meaning set forth in section 24-4-109 (2)(b)(II).(c) "Fund" means the industrial and manufacturing operations clean air grant program cash fund created in subsection (6) of this section.(d) "Grant program" means the industrial and manufacturing operations clean air grant program created in subsection (3)(a) of this section.(e) "Greenhouse gas" has the meaning set forth in section 2-2-322.3 (1)(a).(f)(I) "Industrial and manufacturing operations" means commercial activities in which air pollutants are emitted during or as a result of the activities.(II) "Industrial and manufacturing operations" includes, but is not limited to, operations: (A) By energy producers, refineries, meat packing plants, dairies, steel mills, cement plants, manufacturing operations, mining operations, and airline operations; and(B) At airports, wastewater treatment plants, landfills, and abandoned coal mines.(g) "Local government" means a statutory or home rule municipality, county, city and county, or special district.(h) "Nonattainment area" means an area of the state that the federal environmental protection agency has designated as being in nonattainment with a national ambient air quality standard.(i) "Office" means the Colorado energy office created in section 24-38.5-101.(j) "Public-private partnership" means a partnership between a local government and a private entity that engages in industrial and manufacturing operations.(k) "Special district" means any quasi-municipal corporation and political subdivision organized or acting pursuant to title 32, including a metropolitan district and a water and sanitation district.(l) "Voluntary project" means a project that a private entity, local government, or public-private partnership implements or plans to implement on a voluntary basis to reduce emissions of harmful air pollutants resulting from industrial and manufacturing operations.(3)Grant program.(a) The industrial and manufacturing operations clean air grant program is created to allow private entities, local governments, and public-private partnerships to apply to the office for grant money to help finance voluntary projects to reduce emissions of air pollutants from industrial and manufacturing operations. The office shall administer the grant program.(b) In administering the grant program, the office shall:(I) Establish an application process for private entities, local governments, tribal governments, and public-private partnerships to apply for money to help finance voluntary projects and post information about the application process on the office's website;(II) Determine types of voluntary projects that are eligible for money under the grant program, which types of voluntary projects may include: (A) Energy efficiency projects;(B) Renewable energy projects;(C) Beneficial electrification projects;(D) Transportation electrification projects;(E) Projects producing or utilizing clean hydrogen. If clean hydrogen projects are proposed to receive grant money, the office shall prioritize grant applications for clean hydrogen projects that utilize green hydrogen through electrolysis powered entirely by renewable electric resources over grant applications for clean hydrogen projects that utilize any other clean hydrogen production technology, which other clean hydrogen projects, if awarded grant money, must comply with section 42 U.S.C. sec. 16152 (1).(F) Projects involving carbon capture at industrial facilities and direct air capture projects;(G) Methane capture from landfills, sewage treatment plants, active or inactive coal mines, or agricultural operations;(H) Projects producing or utilizing sustainable aviation fuel; and(I) Industrial process changes that reduce emissions;(III) Develop criteria for awarding money under the grant program, which criteria must include considering statewide carbon management priorities including community and health protections and requiring project data reporting as determined in the carbon management roadmap created in section 24-38.5-122 and giving priority for voluntary projects located in: (A) Disproportionately impacted communities; or(IV) Establish the minimum amount of matching money that an applicant needs to provide to be eligible under the grant program;(V) Determine how a grantee must demonstrate that a voluntary project reduces emissions of air pollutants and ozone precursors, including any modeling requirements for project evaluation and monitoring and testing requirements during project implementation and after project completion;(VI) Require periodic reporting requirements for a grantee to demonstrate that the money awarded is being used in compliance with the purposes of this section; and(VII) Establish procedures for addressing a grantee's noncompliance with this section, including procedures for reimbursement of money awarded.(VIII)(A) Ensure that all types of carbon management projects, with the exception of agricultural, forestry, and enhanced oil recovery projects, are eligible for money under the grant program.(B) As used in this subsection (3)(b)(VIII), "carbon management" has the same meaning as set forth in section 24-38.5-122 (1)(a), and "enhanced oil recovery" has the same meaning as set forth in section 24-38.5-122 (1)(b).(c)(I) Grants cannot be awarded for greenhouse gas emissions reduction improvements put in service at an industrial facility for which an industrial clean energy tax credit is received pursuant to section 39-22-551.(II) As used in this subsection (3)(c), unless the context otherwise requires: (A) "Greenhouse gas emissions reduction improvements" has the same meaning as set forth in section 39-22-551 (2)(e).(B) "Industrial facility" has the same meaning as set forth in section 39-22-551 (2)(g).(4) The office may use up to nine percent of the money in the fund to cover: (a) The direct and indirect costs the office incurs in administering the grant program; and(b) Interagency money transfers for technical support that the department of public health and environment or the department of natural resources may provide the office in administering the grant program.(5)Reporting.(a) On or before January 1, 2025, and on or before January 1 of each year thereafter, the office shall prepare a report summarizing the progress of the grant program and submit the report to the house of representatives energy and environment committee and the senate transportation and energy committee, or their successor committees. The office shall post a copy of each report on its website.(b) Notwithstanding section 24-1-136 (11)(a)(I), the reporting requirements set forth in subsection (5)(a) of this section continue until the grant program repeals pursuant to subsection (7) of this section.(6)Fund.(a)(I) The industrial and manufacturing operations clean air grant program cash fund is created in the state treasury, and the office shall administer the fund for the purposes of this section. The fund consists of any money that the general assembly may transfer or appropriate to the fund for implementation of the grant program and any federal money or gifts, grants, or donations received pursuant to subsection (6)(a)(II) of this section.(II) For the purposes of this section, the office may seek, accept, and expend: (A) Money from federal sources; and(B) Gifts, grants, or donations from private or public sources.(III) The office shall transmit any money received pursuant to subsection (6)(a)(II) of this section to the state treasurer, who shall credit the money to the fund.(b)(I) Except as otherwise provided in subsection (6)(b)(II) of this section, the money in the fund is continuously appropriated to the office for the purposes set forth in this section. The state treasurer shall credit all interest and income derived from the deposit and investment of money in the fund to the fund. Any unexpended and unencumbered money remaining in the fund at the end of a state fiscal year remains in the fund; except that the state treasurer shall transfer any money remaining in the fund at the end of the 2027-28 state fiscal year to the general fund.(II) For state fiscal years 2023-24 and 2024-25, the office and, subject to annual appropriation, the department of revenue may expend money from the fund for the administration and implementation of the industrial clean energy tax credit created in section 39-22-551 and the tax credit for sustainable aviation fuel production facility created in section 39-22-556. The office shall keep an accounting of all money expended from the fund pursuant to this subsection (6)(b)(II) for purposes of calculating the repayment of the administrative costs required by section 24-38.5-120 (3).(7)Repeal. This section is repealed, effective September 1, 2029.Amended by 2024 Ch. 191,§ 5, eff. 5/17/2024.Amended by 2023 Ch. 236,§ 1, eff. 8/7/2023.Amended by 2023 Ch. 167,§ 17, eff. 5/11/2023.Added by 2022 Ch. 300, § 1, eff. 6/2/2022.2023 Ch. 236, was passed without a safety clause. See Colo. Const. art. V, § 1(3).