A Bill for an Act
Page 1, Line 101Concerning authorizing the department of the treasury to
Page 1, Line 102sell tax credits to qualified taxpayers, and, in
Page 1, Line 103connection therewith,creating and allocating the
Page 1, Line 104proceeds to the tax credit sale proceeds cash fund and
Page 1, Line 105transferring the proceeds to the general fund and
Page 1, Line 106making an appropriation.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill authorizes the department of the treasury (department) to issue insurance premium tax credits to insurance companies that are authorized to do business in Colorado and incur premium tax liability, subject to procedures established by the department. The department may contract or consult with an independent third party to manage the bidding process. The department is required to issue an insurance premium tax credit certificate to each successful purchaser.
A qualified taxpayer may claim the insurance premium tax credit against its premium tax liability. The department, in consultation with the office of state planning and budgeting, prior to the sale of an insurance premium tax credit, may determine the calendar years in which the qualified taxpayer may claim the qualified taxpayer's tax credit against the qualified taxpayer's premium tax liability. The amount of the credit claimed cannot exceed the taxpayer's premium tax liability for a given year. The unused amount carries forward and may be claimed in subsequent years; except that a credit cannot be claimed for premium tax liability incurred in a taxable year that begins after December 31, 2033.
The proceeds from the issuance of insurance premium tax credits must be deposited in the general fund.
The bill also authorizes the department to issue income tax credits to C corporations that are authorized to do business in Colorado and incur income tax liability, subject to procedures established by the department. The department may contract or consult with an independent third party to manage the bidding process. The department is required to issue an income tax credit certificate to each successful purchaser.
A qualified taxpayer may claim the income tax credit against its income tax liability. The department, in consultation with the office of state planning and budgeting, prior to the sale of an income tax credit, may determine the calendar years in which the qualified taxpayer may claim the qualified taxpayer's tax credit against the qualified taxpayer's income tax liability. The amount of the credit claimed cannot exceed the taxpayer's income tax liability for a given year. The unused amount carries forward and may be claimed in subsequent years; except that a credit cannot be claimed for income tax liability incurred in a taxable year that begins after December 31, 2033.
The proceeds from the issuance of income tax credits must be deposited in the general fund.
The department is authorized to issue up to a total of $125 million in insurance premium tax credit certificates and income tax credit certificates in fiscal year 2025-26.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, add part 4 to article 36 of title 24 as follows:
Page 3, Line 1PART 4
SALE OF INSURANCE PREMIUM TAX CREDITS
Page 3, Line 224-36-401. Legislative declaration - tax preference
Page 3, Line 3performance statement. (1) The general assembly finds and declares that:
Page 3, Line 4(a) The insurance premium tax credits authorized by this
Page 3, Line 5part 4 are not refundable and do not impose an obligation of payment in any future year on the state;
Page 3, Line 6(b) The use of proceeds from the sale of insurance premium
Page 3, Line 7tax credits does not require the state to borrow money, extend
Page 3, Line 8or pledge the state's credit, or obligate the state to make future payments from state revenue;
Page 3, Line 9(c) The sale and use of the tax credits shall not be deemed
Page 3, Line 10or construed as creating indebtedness or other financial
Page 3, Line 11obligation whatsoever within the meaning of any provision of
Page 3, Line 12the state constitution or the laws of the state concerning or
Page 3, Line 13limiting the creation of indebtedness or other financial obligation by the state;
Page 3, Line 14(d) The tax credits allow an insurance company with an
Page 3, Line 15insurance premium tax liability to prepay its tax liability for
Page 3, Line 16future years, which does not constitute a tax policy change under section 20 (4)(a) of article X of the state constitution; and
Page 3, Line 17(e) Any proceeds from the sale of the tax credits will be
Page 3, Line 18offset by decreases in future revenue resulting from the buyer's
Page 3, Line 19use of the tax credits and therefore will not cause a net tax
Page 3, Line 20revenue gain under section 20 (4)(a) of article X of the state constitution.
Page 4, Line 1(2) (a) In accordance with section 39-21-304 (1), which
Page 4, Line 2requires each bill that creates a new tax expenditure to include
Page 4, Line 3a tax preference performance statement as part of a statutory
Page 4, Line 4legislative declaration, the general assembly further finds and
Page 4, Line 5declares that the general purposes of the tax credits provided
Page 4, Line 6for in this part 4 are to induce certain designated behavior by
Page 4, Line 7taxpayers and provide a reduction in insurance premium tax
Page 4, Line 8liability for certain businesses. Specifically, this tax
Page 4, Line 9expenditure is intended to induce insurance companies to
Page 4, Line 10purchase tax credits that will reduce their future insurance
Page 4, Line 11premium tax liability in order to generate money for the general fund.
Page 4, Line 12(b) The general assembly and the state auditor shall
Page 4, Line 13measure the effectiveness of the tax credits in achieving the
Page 4, Line 14purposes specified in subsection (2)(a) of this section based on the
Page 4, Line 15number and value of the credits claimed and the total amount
Page 4, Line 16of general fund money generated. The division of insurance
Page 4, Line 17shall provide the state auditor with information regarding the
Page 4, Line 18total amount of credits claimed and the general fund money generated.
Page 4, Line 1924-36-402. Definitions.As used in this part 4, unless the context otherwise requires:
Page 4, Line 20(1) "Department" means the department of the treasury.
Page 4, Line 21(2) "Division of insurance" means the division of insurance
Page 4, Line 22in the department of regulatory agencies created in section
Page 4, Line 2310-1-103.
Page 5, Line 1(3) "Premium tax liability" means the liability imposed by
Page 5, Line 2section 10-3-209 or 10-6-128, or, in the case of a repeal or
Page 5, Line 3reduction by the state of the liability imposed by section
Page 5, Line 410-3-209 or 10-6-128, any other tax liability imposed upon an insurance company by the state.
Page 5, Line 5(4) "Qualified taxpayer" means an insurance company
Page 5, Line 6authorized to do business in Colorado that has premium tax
Page 5, Line 7liability owing to the state and that purchases a tax credit
Page 5, Line 8under this part 4. "Qualified taxpayer" also includes an
Page 5, Line 9insurance company that receives or assumes a tax credit
Page 5, Line 10transferred in accordance with section 24-36-403 (7)(e) or 24-36-404 (5).
Page 5, Line 11(5) "Tax credit" means the tax credit created in section 24-36-403.
Page 5, Line 12(6) "Tax credit sale proceeds" or "sale proceeds" means
Page 5, Line 13the money or other liquid asset acceptable to the state
Page 5, Line 14treasurer that a qualified taxpayer pays to the department
Page 5, Line 15that is deposited in the tax credit sale proceeds cash fund created in section 24-36-405 (1).
Page 5, Line 1624-36-403. Insurance premium tax credits - purchase -
Page 5, Line 17authorization to issue - terms - report. (1) A qualified taxpayer
Page 5, Line 18may purchase insurance premium tax credits from the
Page 5, Line 19department in accordance with this section and may apply the
Page 5, Line 20tax credits against its premium tax liability in accordance with section 24-36-404.
Page 5, Line 21(2) (a) (I) The department is authorized to issue tax credit
Page 5, Line 22certificates to qualified taxpayers pursuant to this part 4 and
Page 6, Line 1part 5 of this article 36 equal to the lesser of a total face value
Page 6, Line 2of up to one hundred twenty-five million dollars or total
Page 6, Line 3sales proceeds of up to one hundred million dollars, plus any
Page 6, Line 4reasonable and necessary administrative, monitoring, andclosing costs.
Page 6, Line 5(II) The department shall first offer for sale tax credits
Page 6, Line 6to a qualified taxpayer that has a qualified home office or
Page 6, Line 7regional home office in this state, as determined by the
Page 6, Line 8commissioner of insurance pursuant to section 10-3-209 (1)(b)(III),
Page 6, Line 9and shall issue any corresponding tax credit certificates to a
Page 6, Line 10qualified taxpayer purchasing the tax credits in accordance
Page 6, Line 11with this section before offering for sale tax credits to any other potential purchaser.
Page 6, Line 12(b) The department may contract with an independent
Page 6, Line 13third party to conduct or consult on a bidding process among qualified taxpayers to purchase the tax credits.
Page 6, Line 14(c) The department shall consult with insurance
Page 6, Line 15companies in advance of issuing any tax credits in accordance with this section.
Page 6, Line 16(3) An insurance company authorized to do business in
Page 6, Line 17Colorado seeking to purchase tax credits must apply to the department in the manner prescribed by the department.
Page 6, Line 18(4) Using procedures adopted by the department or, if
Page 6, Line 19applicable, by an independent third party, each insurance
Page 6, Line 20company that submits an application shall make a timely and
Page 6, Line 21irrevocable offer, contingent only on the department's issuance
Page 6, Line 22to the insurance company of the tax credit certificates, to make
Page 7, Line 1a specified purchase payment amount to the department on dates
Page 7, Line 2specified by the department, which must not burden any single tax year. The offer must include:
Page 7, Line 3(a) The requested amount of tax credits, which must not
Page 7, Line 4be less than any minimum amount established in procedures by the department or, if applicable, the independent third party;
Page 7, Line 5(b) The qualified taxpayer's proposed tax credit purchase
Page 7, Line 6amount for each tax credit dollar requested. The minimum
Page 7, Line 7proposed tax credit purchase amount must be the greater of either:
Page 7, Line 8(I) The percentage of the requested dollar amount of tax
Page 7, Line 9credits that the department and, if applicable, the independent
Page 7, Line 10third party determines to be consistent with market conditions as of the offer date; or
Page 7, Line 11(II) Eightypercent of the requested dollar amount of tax credits; and
Page 7, Line 12(c) Any other information the department or, if applicable, the independent third party requires.
Page 7, Line 13(5) The department shall provide written notice to each
Page 7, Line 14insurance company that submits an application indicating
Page 7, Line 15whether the insurance company has been approved as a
Page 7, Line 16purchaser of tax credits and, if so, the amount of tax credits
Page 7, Line 17allocated and the date by which payment of the tax credit sale proceeds must be made.
Page 7, Line 18(6) On receipt of payment of the sale proceeds, the
Page 7, Line 19department shall issue to each qualified taxpayer a tax credit
Page 7, Line 20certificate. The tax credit certificate must state:
Page 8, Line 1(a) The total amount of premium tax credits that the qualified taxpayer may claim;
Page 8, Line 2(b) The amount that the qualified taxpayer has paid or
Page 8, Line 3agreed to pay in return for the issuance of the tax credit certificates and the date of the payment;
Page 8, Line 4(c) The dates on which the tax credits will be available for use by the qualified taxpayer;
Page 8, Line 5(d) Any penalties or other remedies for noncompliance;
Page 8, Line 6(e) The procedures to be used for transferring or
Page 8, Line 7assuming the tax credits in accordance with subsection (7)(e) of this section or section 24-36-404 (5);
Page 8, Line 8(f) The serial number of the tax credit certificate; and
Page 8, Line 9(g) Any other requirements deemed necessary by the department as a condition of issuing the tax credit certificate.
Page 8, Line 10(7) (a) The department shall not issue a tax credit
Page 8, Line 11certificate to any qualified taxpayer that fails to provide the
Page 8, Line 12tax credit sale proceeds within the time the department specifies.
Page 8, Line 13(b) A qualified taxpayer that fails to provide the tax
Page 8, Line 14credit sale proceeds within the time the department specifies is
Page 8, Line 15subject to a penalty equal to ten percent of the amount of the
Page 8, Line 16purchase price that remains unpaid. The penalty must be paid to the department within thirty days after demand.
Page 8, Line 17(c) The department may offer to reallocate the defaulted
Page 8, Line 18tax credits among other qualified taxpayers, so that the result
Page 8, Line 19after reallocation is the same as if the initial allocation had
Page 8, Line 20been performed without considering the tax credit allocation to the defaulting qualified taxpayer.
Page 9, Line 1(d) If the reallocation of tax credits under subsection
Page 9, Line 2(7)(c) of this section results in the payment by another qualified
Page 9, Line 3taxpayer of the amount of tax credit sale proceeds not paid by
Page 9, Line 4the defaulting qualified taxpayer, the department may waive the penalty imposed under subsection (7)(b) of this section.
Page 9, Line 5(e) A qualified taxpayer that fails to pay the tax credit
Page 9, Line 6sale proceeds within the time specified may avoid the imposition
Page 9, Line 7of the penalty by transferring the allocation of tax credits to
Page 9, Line 8a new or existing qualified taxpayer within thirty days after the
Page 9, Line 9due date of the defaulted installment. Any transferee of an
Page 9, Line 10allocation of tax credits of a defaulting qualified taxpayer
Page 9, Line 11under this subsection (7) shall agree to pay the tax credit sale proceeds within five days after the date of the transfer.
Page 9, Line 12(8) The tax credit sale proceeds provided by a qualified
Page 9, Line 13taxpayer in return for a tax credit certificate must be deposited
Page 9, Line 14in the tax credit sale proceeds cash fundcreated in section 24-36-405 (1).
Page 9, Line 15(9) (a) The department shall provide, within thirty days
Page 9, Line 16after the close of the fiscal year, a data file to the division of
Page 9, Line 17insurance and the department of revenue for each fiscal year
Page 9, Line 18in which it issues tax credit certificates pursuant to this part 4. The data file must include:
Page 9, Line 19(I) The name and identifying number issued by the
Page 9, Line 20National Association of Insurance Commissioners, or any
Page 9, Line 21successor organization, of each qualified taxpayer to which the
Page 9, Line 22department issued a tax credit certificate;
Page 10, Line 1(II) The total amount of the tax credit allocated to the qualified taxpayer; and
Page 10, Line 2(III) The serial number of the tax credit certificate issued to the qualified taxpayer.
Page 10, Line 3(b) The department shall maintain records of each tax
Page 10, Line 4credit certificate issued, transferred, or assumed that are
Page 10, Line 5sufficient to allow the department of revenue or the division of
Page 10, Line 6insurance to verify the issuance and ownership of the credit.
Page 10, Line 7The department shall provide the records to the office of the
Page 10, Line 8state auditor upon request so that the state auditor can
Page 10, Line 9evaluate the effectiveness of the tax credits in accordance with sections 24-36-401 (2)(b) and 39-21-305.
Page 10, Line 10(10) The department may pay an independent third party
Page 10, Line 11and any consultants reasonable and necessary administrative,
Page 10, Line 12monitoring, and closing costs using the proceeds from the sale of tax credits.
Page 10, Line 1324-36-404. Use of insurance premium tax credits - carry over.
Page 10, Line 14(1) For a tax credit certificate issued in fiscal year 2025-26, the
Page 10, Line 15department, in consultation with the office of state planning
Page 10, Line 16and budgeting, prior to the sale, may determine the calendar
Page 10, Line 17years in which the qualified taxpayer may claim the qualified
Page 10, Line 18taxpayer's tax credit against the qualified taxpayer's premium tax liability.
Page 10, Line 19(2) The total credit to be applied by a qualified taxpayer
Page 10, Line 20in any one year must not exceed the premium tax liability of the
Page 10, Line 21qualified taxpayer for the taxable year. If the qualified
Page 10, Line 22taxpayer cannot use the entire amount of the tax credit for the
Page 11, Line 1taxable year in which the taxpayer is eligible for the credit, the
Page 11, Line 2excess may be carried over to succeeding taxable years and
Page 11, Line 3used as a credit against the premium tax liability of the
Page 11, Line 4taxpayer for those taxable years; except that the credit may
Page 11, Line 5not be carried over to any taxable year that begins after
Page 11, Line 6December 31, 2033. Any amount of the credit that is not timely claimed expires and is not refundable.
Page 11, Line 7(3) A qualified taxpayer claiming a credit under this part 4 shall submit the tax credit certificate with its tax return.
Page 11, Line 8(4) A qualified taxpayer claiming a tax credit under this
Page 11, Line 9part 4 shall not be required to pay any additional or retaliatory tax as a result of claiming the credit.
Page 11, Line 10(5) If a qualified taxpayer holding an unclaimed tax
Page 11, Line 11credit is part of a merger, acquisition, or line of business
Page 11, Line 12divestiture transaction, the tax credit may be transferred to
Page 11, Line 13and assumed by the resulting entity if the resulting entity is an
Page 11, Line 14insurance company authorized to do business in Colorado that
Page 11, Line 15has premium tax liability. The qualified taxpayer that
Page 11, Line 16originally purchased the credit and the resulting entity shall
Page 11, Line 17notify the department in writing of the transfer or assumption
Page 11, Line 18of the credit in accordance with procedures adopted by the
Page 11, Line 19department. The transfer or assumption of the tax credit does
Page 11, Line 20not affect the time schedule for claiming the tax credit as provided in this section.
Page 11, Line 21(6) The department shall provide a report to the division
Page 11, Line 22of insurance for each fiscal year in which it issues tax credit
Page 11, Line 23certificates pursuant to this part 4 within thirty days after the close of the fiscal year. The report must include:
Page 12, Line 1(a) The name and identifying number issued by the
Page 12, Line 2National Association of Insurance Commissioners, or any
Page 12, Line 3successor organization, of each qualified taxpayer to which the department issued a tax credit certificate;
Page 12, Line 4(b) The total amount of the tax credit allocated to the qualified taxpayer; and
Page 12, Line 5(c) The serial number of the tax credit certificate issued,
Page 12, Line 6transferred, or assumed that is sufficient to allow the division
Page 12, Line 7of insurance in the department of regulatory agencies to verify the issuance and ownership of the tax credit.
Page 12, Line 824-36-405. Tax credit sale proceeds cash fund - creation.
Page 12, Line 9(1) The tax credit sale proceeds cash fund is created in the state
Page 12, Line 10treasury. The fund consists of money generated by sale
Page 12, Line 11proceeds credited to the fund pursuant to section 24-36-406 and
Page 12, Line 12any other money that the general assembly may appropriate or transfer to the fund.
Page 12, Line 13(2) The state treasurer shall credit all interest and
Page 12, Line 14income derived from the deposit and investment of money in the tax credit sale proceeds cash fund to the fund.
Page 12, Line 15(3) The state treasurer shall transfer any unexpended
Page 12, Line 16and unencumbered money remaining in the tax credit sale
Page 12, Line 17proceeds cash fund at the end of a fiscal year to the general fund.
Page 12, Line 18(4) (a) Subject to annual appropriation by the general
Page 12, Line 19assembly, the department may expend money from the fund for
Page 12, Line 20any reasonable and necessary administrative, monitoring, and
Page 13, Line 1closing costs associated with implementing and administering parts 4 and 5 of this article.
Page 13, Line 2(b) Subject to annual appropriation by the general
Page 13, Line 3assembly, the department of revenue may expend money from the
Page 13, Line 4fund for direct and indirect costs associated with implementing and administering parts 4 and 5 of this article.
Page 13, Line 524-36-406. Distribution of sale proceeds.Each month, the
Page 13, Line 6state treasurer shall credit the money generated by the sale
Page 13, Line 7proceeds pursuant to parts 4 and 5 of this article 36 to the tax
Page 13, Line 8credit sale proceeds cash fund. The department shall transfer
Page 13, Line 9the money to the general fund less any amounts used for the expenses described in section 24-36-405 (4).
Page 13, Line 1024-36-407. Repeal of part.This part 4 is repealed, effective December 31, 2040.
Page 13, Line 11SECTION 2. In Colorado Revised Statutes, add part 5 to article 36 of title 24 as follows:
Page 13, Line 12PART 5
SALE OF CORPORATE TAX CREDITS
Page 13, Line 1324-36-501. Legislative declaration - tax preference
Page 13, Line 14performance statement. (1) The general assembly finds and declares that:
Page 13, Line 15(a) The corporate tax credits authorized by this part 5 are
Page 13, Line 16not refundable and do not impose an obligation of payment in any future year on the state;
Page 13, Line 17(b) The use of proceeds from the sale of corporate tax
Page 13, Line 18credits does not require the state to borrow money, extend or
Page 13, Line 19pledge the state's credit, or obligate the state to make future payments from state revenue;
Page 14, Line 1(c) The sale and use of the corporate tax credits shall
Page 14, Line 2not be deemed or construed as creating indebtedness or other
Page 14, Line 3financial obligation whatsoever within the meaning of any
Page 14, Line 4provision of the state constitution or the laws of the state
Page 14, Line 5concerning or limiting the creation of indebtedness or other financial obligation by the state;
Page 14, Line 6(d) The tax credits allow a corporation with an income
Page 14, Line 7tax liability to prepay its tax liability for future years, which
Page 14, Line 8does not constitute a tax policy change under section 20 (4)(a) of article X of the state constitution; and
Page 14, Line 9(e) Any proceeds from the sale of the tax credits will be
Page 14, Line 10offset by decreases in future revenue resulting from the buyer's
Page 14, Line 11use of the tax credits and therefore will not cause a net tax
Page 14, Line 12revenue gain under section 20 (4)(a) of article X of the state constitution.
Page 14, Line 13(2) (a) In accordance with section 39-21-304 (1), which
Page 14, Line 14requires each bill that creates a new tax expenditure to include
Page 14, Line 15a tax preference performance statement as part of a statutory
Page 14, Line 16legislative declaration, the general assembly further finds and
Page 14, Line 17declares that the general purposes of the tax credits provided
Page 14, Line 18for in this part 5 are to induce certain designated behavior by
Page 14, Line 19taxpayers and provide a reduction in income tax liability for
Page 14, Line 20certain businesses. Specifically, this tax expenditure is intended
Page 14, Line 21to induce C corporations to purchase tax credits that will
Page 14, Line 22reduce their future income tax liability in order to generate
Page 14, Line 23money for the general fund.
Page 15, Line 1(b) The general assembly and the state auditor shall
Page 15, Line 2measure the effectiveness of the tax credits in achieving the
Page 15, Line 3purposes specified in subsection (2)(a) of this section based on the
Page 15, Line 4number and value of the credits claimed and the total amount
Page 15, Line 5of general fund money generated. The department of revenue
Page 15, Line 6shall provide the state auditor with information regarding the
Page 15, Line 7total amount of credits claimed and the general fund money generated.
Page 15, Line 824-36-502. Definitions.As used in this part 5, unless the context otherwise requires:
Page 15, Line 9(1) "C corporation" has the same meaning as in section39-22-103 (2.5).
Page 15, Line 10(2) "Department" means the department of the treasury.
Page 15, Line 11(3) "Income tax liability" means the liability imposed by section 39-22-301.
Page 15, Line 12(4) "Qualified taxpayer" means a C corporation
Page 15, Line 13authorized to do business in Colorado that has or will have an
Page 15, Line 14income tax liability owing to the state. "Qualified taxpayer"
Page 15, Line 15also includes a C corporation that receives or assumes a tax credit transferred in accordance with section 26-36-503 (7)(e).
Page 15, Line 16(5) "Tax credit" means the tax credit created in section 24-36-503.
Page 15, Line 17(6) "Tax credit sale proceeds" or "sale proceeds" means
Page 15, Line 18the money or other liquid asset acceptable to the state
Page 15, Line 19treasurer that a qualified taxpayer pays to the department
Page 15, Line 20that is deposited in the tax credit sale proceeds cash fund
Page 15, Line 21created in section 24-36-405 (1).
Page 16, Line 124-36-503. Corporate tax credits - purchase - authorization to
Page 16, Line 2issue - terms - report. (1) A qualified taxpayer may purchase
Page 16, Line 3income tax credits from the department in accordance with this
Page 16, Line 4section and may apply the tax credits against its income tax liability in accordance with section 24-36-504.
Page 16, Line 5(2) (a) The department is authorized to issue tax credit
Page 16, Line 6certificates to qualified taxpayers pursuant to this part 5 and
Page 16, Line 7part 4 of this article 36 equal to the lesser of a total face value
Page 16, Line 8of up to one hundred twenty-five million dollars or total sales
Page 16, Line 9proceeds of up to one hundred. million dollars, plus any
Page 16, Line 10reasonable and necessary administrative, monitoring, andclosing costs.
Page 16, Line 11(b) The department may contract with an independent
Page 16, Line 12third party to conduct or consult on a bidding process among qualified taxpayers to purchase the tax credits.
Page 16, Line 13(c) The department shall consult with C corporations in
Page 16, Line 14advance of issuing any tax credits in accordance with this section.
Page 16, Line 15(3) A C corporation authorized to do business in Colorado
Page 16, Line 16seeking to purchase tax credits must apply to the department in the manner prescribed by the department.
Page 16, Line 17(4) Using procedures adopted by the department or, if
Page 16, Line 18applicable, by an independent third party, each C corporation
Page 16, Line 19that submits an application shall make a timely and irrevocable
Page 16, Line 20offer, contingent only on the department's issuance to the C
Page 16, Line 21corporation of the tax credit certificates, to make a specified
Page 16, Line 22purchase payment amount to the department on dates specified
Page 17, Line 1by the department, which must not burden any single tax year. The offer must include:
Page 17, Line 2(a) The requested amount of tax credits, which must not
Page 17, Line 3be less than any minimum amount established in procedures by the department or, if applicable, the independent third party;
Page 17, Line 4(b) The qualified taxpayer's proposed tax credit purchase
Page 17, Line 5amount for each tax credit dollar requested. The minimum
Page 17, Line 6proposed tax credit purchase amount must be the greater of either:
Page 17, Line 7(I) The percentage of the requested dollar amount of tax
Page 17, Line 8credits that the department and, if applicable, the independent
Page 17, Line 9third party determines to be consistent with market conditions as of the offer date; or
Page 17, Line 10(II) Eightypercent of the requested dollar amount of tax credits; and
Page 17, Line 11(c) Any other information the department or, if applicable, the independent third party requires.
Page 17, Line 12(5) The department shall provide written notice to each
Page 17, Line 13C corporation that submits an application indicating whether
Page 17, Line 14the C corporation has been approved as a purchaser of tax
Page 17, Line 15credits and, if so, the amount of tax credits allocated and the
Page 17, Line 16date by which payment of the tax credit sale proceeds must be made.
Page 17, Line 17(6) On receipt of payment of the sale proceeds, the
Page 17, Line 18department shall issue to each qualified taxpayer a tax credit certificate. The tax credit certificate must state:
Page 17, Line 19(a) The total amount of income tax credits that the qualified taxpayer may claim;
Page 18, Line 1(b) The amount that the qualified taxpayer has paid for
Page 18, Line 2the issuance of the tax credit certificates and the date of the payment;
Page 18, Line 3(c) The dates on which the tax credits will be available for use by the qualified taxpayer;
Page 18, Line 4(d) Any penalties or other remedies for noncompliance;
Page 18, Line 5(e) The procedures to be used for transferring or
Page 18, Line 6assuming the tax credits in accordance with subsection (7)(e) of this section;
Page 18, Line 7(f) The serial number of the tax credit certificate; and
Page 18, Line 8(g) Any other requirements deemed necessary by the department as a condition of issuing the tax credit certificate.
Page 18, Line 9(7) (a) The department shall not issue a tax credit
Page 18, Line 10certificate to any qualified taxpayer that fails to provide the
Page 18, Line 11tax credit sale proceeds within the time the department specifies.
Page 18, Line 12(b) A qualified taxpayer that fails to provide the tax
Page 18, Line 13credit sale proceeds within the time the department specifies is
Page 18, Line 14subject to a penalty equal to ten percent of the amount of the
Page 18, Line 15purchase price that remains unpaid. The penalty must be paid to the department within thirty days after demand.
Page 18, Line 16(c) The department may offer to reallocate the defaulted
Page 18, Line 17tax credits among other qualified taxpayers so that the result
Page 18, Line 18after reallocation is the same as if the initial allocation had
Page 18, Line 19been performed without considering the tax credit allocation
Page 18, Line 20to the defaulting qualified taxpayer.
Page 19, Line 1(d) If the reallocation of tax credits under subsection
Page 19, Line 2(7)(c) of this section results in the payment by another qualified
Page 19, Line 3taxpayer of the amount of tax credit sale proceeds not paid by
Page 19, Line 4the defaulting qualified taxpayer, the department may waive the penalty imposed under subsection (7)(b) of this section.
Page 19, Line 5(e) A qualified taxpayer that fails to pay the tax credit
Page 19, Line 6sale proceeds within the time specified may avoid the imposition
Page 19, Line 7of the penalty by transferring the allocation of tax credits to
Page 19, Line 8a new or existing qualified taxpayer within thirty days after the
Page 19, Line 9due date of the defaulted installment. Any transferee of an
Page 19, Line 10allocation of tax credits of a defaulting qualified taxpayer
Page 19, Line 11under this subsection (7) shall agree to pay the tax credit sale proceeds within five days after the date of the transfer.
Page 19, Line 12(8) The tax credit sale proceeds provided by a qualified
Page 19, Line 13taxpayer in return for a tax credit certificate must be deposited
Page 19, Line 14in the tax credit sale proceeds cash fundcreated in section 24-36-405 (1).
Page 19, Line 15(9) (a) The department shall provide, within thirty days
Page 19, Line 16after the close of the fiscal year, a data file to the department
Page 19, Line 17of revenue for each fiscal year in which it issues tax credit certificates pursuant to this part 5. The data file must include:
Page 19, Line 18(I) The name and federal employer identification number
Page 19, Line 19of each qualified taxpayer to which the department issued a tax credit certificate;
Page 19, Line 20(II) The total amount of the tax credit allocated to the qualified taxpayer; and
Page 19, Line 21(III) The serial number of the tax credit certificate issued to the qualified taxpayer.
Page 20, Line 1(b) The department shall maintain records of each tax
Page 20, Line 2credit certificate issued, transferred, or assumed that are
Page 20, Line 3sufficient to allow the department of revenue to verify the
Page 20, Line 4issuance and ownership of the credit. The department shall
Page 20, Line 5provide the records to the office of the state auditor upon
Page 20, Line 6request so that the state auditor can evaluate the
Page 20, Line 7effectiveness of the tax credits in accordance with sections 24-36-501 (2)(b) and 39-21-305.
Page 20, Line 8(10) The department may pay an independent third party
Page 20, Line 9and any consultants reasonable and necessary administrative,
Page 20, Line 10monitoring, and closing costs using the proceeds from the sale of tax credits.
Page 20, Line 1124-36-504. Use of corporate income tax credits - carry over.
Page 20, Line 12(1) For a tax credit certificate issued in fiscal year 2025-26, the
Page 20, Line 13department, in consultation with the office of state planning
Page 20, Line 14and budgeting, prior to the sale, may determine the tax years in
Page 20, Line 15which the qualified taxpayer may claim the qualified taxpayer's tax credit against the qualified taxpayer's income tax liability.
Page 20, Line 16(2) For the tax year specified in the tax credit certificate
Page 20, Line 17issued pursuant to section 24-34-503 (6), the qualified taxpayer
Page 20, Line 18may claim the amount of the tax credit against the qualified
Page 20, Line 19taxpayer's income tax liability. If the amount of the tax credit
Page 20, Line 20exceeds the qualified taxpayer's actual tax liability for that
Page 20, Line 21tax year, the excess is not refunded to the qualified taxpayer.
Page 20, Line 22The qualified taxpayer may carry forward and apply the unused
Page 20, Line 23tax credit against the income tax liability for any succeeding
Page 21, Line 1tax year; except that the tax credit may not be carried forward
Page 21, Line 2to a tax year that begins after December 31, 2033. The taxpayer
Page 21, Line 3shall apply the carry forward credit against the income tax
Page 21, Line 4liability for the earliest of the income tax years possible. Any
Page 21, Line 5amount of the tax credit that is not used after this period is not refundable.
Page 21, Line 6(3) A qualified taxpayer claiming a credit under this part 5 shall submit the tax credit certificate with its tax return.
Page 21, Line 824-36-505. Repeal of part.This part 5 is repealed, effective December 31, 2040.
Page 21, Line 9SECTION 3. Appropriation. For the 2025-26 state fiscal year,
Page 21, Line 10$3,173,500 is appropriated to the department of treasury. This
Page 21, Line 11appropriation is from the tax credit sale proceeds cash fund created in
Page 21, Line 12section 24-36-405, C.R.S. To implement this act, the department may use this appropriation for tax credit administration.
Page 21, Line 13SECTION 4. Safety clause. The general assembly finds,
Page 21, Line 14determines, and declares that this act is necessary for the immediate
Page 21, Line 15preservation of the public peace, health, or safety or for appropriations for
Page 21, Line 16the support and maintenance of the departments of the state and state institutions.