In an effort to decarbonize the state’s building sector, Colorado lawmakers passed a bill Wednesday that will require local governments to update their building codes to maximize energy efficiency in new construction.

The Building Greenhouse Gas Emissions Bill (HB22-1362) aims to reduce carbon emissions from new commercial buildings and homes through changes to municipal codes. By July 1, 2023, local governments will have to adopt building energy codes that meet or exceed the energy performance of the 2021 International Energy Conservation Code. It will also require that updated codes include language for solar-ready, energy-efficient and low-carbon buildings.

The legislation will establish a new Energy Code Advisory Board that will model the language required in updated energy codes, acting as a resource for municipalities. The co-chairs for the 21-member board will be representatives from the Colorado Energy Office and Department of Local Affairs, according to a press release from the Southwest Energy Efficiency Project.

“HB22-1362 will facilitate adoption of rooftop solar systems, high efficiency heat pumps, and electric vehicles in homes and commercial buildings that do not include these features from the start,” Meera Fickling, senior climate policy analyst with Western Resource Advocates, said in a statement. “This will extend the climate benefits of the bill beyond those provided by the energy efficiency improvements in new construction.”

In addition to the new code requirements, the bill funds grants for nonprofits and government buildings to upgrade to high-efficiency electric heating equipment and appliances. The bill also establishes the Clean Air Building Investments Fund, which will transfer $21 million from the general fund to finance the grant programs.

“The energy code requirements as well as the grants programs will expand the market for high efficiency heating and cooling equipment, insulation/air sealing, building control systems and other energy efficiency measures,” Patricia Rothwell, executive director of the Energy Efficiency Business Coalition of Colorado, said in a press release.

HB22-1362 is currently awaiting Gov. Jared Polis’ signature, with the legislature confident that he’ll sign the bill into law.