Rep. Jennifer Bacon

The act adjusts several state tax expenditures as follows:Requires the state treasurer to transfer $45.6 million from the general fund to the state highway fund on July 1, 2026, and $96.4 million on each July 1 from July 1, 2027, through July 1, 2031;Prohibits certain local use tax ordinances, resolutions, or proposals from applying to construction and building materials used by a common rail carrier pursuant to a contract with the state, a political subdivision of the state, or a special district allowing the contracting government to use the carrier's property or tracks for the provision of public passenger rail service;For income tax years commencing on and after January 1, 2027, requires a taxpayer to add to the taxpayer's federal taxable income the excess of any gain excluded from federal gross income pursuant to section 1400Z-2 (a)(1)(A) of the internal revenue code over the gain invested by the taxpayer in a Colorado-qualified opportunity fund in a manner that qualifies for exclusion from federal gross income pursuant to the same section of the internal revenue code;For income tax years commencing on or after January 1, 2027, allows a combined group to elect to make a water's-edge filing election and describes what should be taken into account in such a filing;For income tax years commencing on and after January 1, 2027, requires a corporation to add to the corporation's federal taxable income the excess of any gain excluded from federal gross income pursuant to section 1400Z-2 (a)(1)(A) of the internal revenue code over the amount of that gain invested in a Colorado qualified opportunity fund and the amount of any gain excluded from federal gross income as a result of an election made pursuant to section 1400Z-2(c) of the internal revenue code for amounts invested in a qualified opportunity fund that is not a Colorado qualified opportunity fund; allows a corporation to subtract from federal taxable income the amount of gain included in federal gross income pursuant to section 1400Z-2(b) of the internal revenue code to the extent that the gain was added to federal taxable income pursuant to the opportunity fund add-backs for a prior tax year; changes the definition of federal taxable income for a C corporation that is in a combined group; repeals the state corporate income tax deduction for wages or salaries paid that are not allowed to be deducted at the federal level pursuant to section 280C of the internal revenue code; and eliminates the ability of corporations to deduct from their income tax liability any amount included in federal taxable income pursuant to sections 951 (a) or 951A (a) of the internal revenue code with respect to a controlled foreign corporation incorporated in a foreign jurisdiction for the purpose of tax avoidance;Eliminates a potential reduction in the amount available for the heat pump technology and thermal energy network tax credit, for years following 2025 based on an economic forecast by the office of state planning and budgeting or legislative council staff;Increases the innovative motor vehicle tax credit from $1,000 to $2,000 for certain vehicles sold or leased during the 2027 income tax year, and from $500 to $1,000 for certain vehicles sold or leased during the 2028 income tax year, and provides that certain vehicles with an manufacturer's suggested retail price (MSRP) below $40,000 that are sold or leased on or after January 1, 2027, but before January 1, 2029, are eligible for the additional tax credit.Clarifies that a potential 50% reduction in the innovative motor vehicle tax credit and the innovative trucks tax credit, triggered by certain state revenue forecasts, applies to the income tax year;For income tax years commencing on or after January 1, 2027, modifies the income tax credit for wildfire hazard mitigation expenses by adding a definition of 'infestation mitigation measures' that includes the thinning of woody vegetation that is at risk of mountain pine beetle or spruce beetle infestation or that has been killed by mountain pine beetles or spruce beetles, if such activities meet or exceed any state forest service standards or any other applicable state rules, and modifies the amount of the credit available to be fully refundable without being carried forward;For income tax years commencing on or after January 1, 2027, expands the income tax credit for the purchase of small food business recovery grant program equipment to be available for additional food distributors and producers, adjusts the amount of the tax credit that may be offered and claimed for the purchase of small food business recovery grant program equipment or participation in the supplemental food assistance benefit program, requires the department of agriculture to approve or disapprove an application for a credit within a reasonable time, which shall not exceed 150 days after the filing of the application, caps the amount of credits issued at $10 million for calendar years commencing before January 1, 2027, $5 million for the calendar year commencing on January 1, 2027, and a total of $5 million for calendar years commencing on or after January 1, 2028, and allows a purchaser that is not subject to income tax to be eligible for the credit.Extends the electric-powered lawn equipment tax credit until January 1, 2030, and allows a qualified retailer to elect advance payments of the credit;For income tax years commencing on or after January 1, 2027, allows an entity not subject to income tax to be eligible for an income tax credit for developing a qualified industrial facility, allows a taxpayer to claim the credit for installing equipment used for utilization of biomethane, requires the Colorado energy office (CEO) to review applications for the credit within 120, rather than 90, days, and for any semi-annual application period commencing on or after July 1, 2026, allows the CEO to adjust the limits on the aggregate amount of tax credits available to be reserved.Changes the reservation process for a tax credit made in connection with a geothermal energy project beginning on July 1, 2026;Provides that the department may disqualify a retailer of electric bicycles from the electric bicycle tax credit if the retailer requested advance payment of the credit or claimed a credit for a transaction that does not qualify for the credit, the retailer provided false information to the department of revenue or CEO, the retailer did not comply with the statutory requirements for the credit, or the retailer does not hold a sales tax license;Allows the executive director of the department of revenue to share taxpayer information with the CEO relating to a claim for an income tax credit for the retail sale of a qualified electric bicycle or the sale of a heat pump, which must remain confidential;Repeals the sustainable aviation fuel (SAF) production facility tax credit, effective January 1, 2027;Establishes the sustainable aviation fuel purchase income tax credit for income tax years beginning on or after January 1, 2027, and before December 31, 2032, where the amount of the credit is initially $1.50, increased by $.01 for each whole percentage of carbon intensity reduction in excess of 50%, but no greater than 100%, per gallon of SAF purchased for use in the state by the taxpayer, and the CEO may adjust that amount annually;Beginning January 1, 2028, the CEO may allow an additional credit of 50 cents for each gallon of SAF produced in the state that a qualified taxpayer purchased for use in the state during the income tax year, except as provided by the cap and reservation system, the total amount of credits issued cannot exceed $3 million per tax year, taxpayers must apply to the CEO for a tax credit certificate and CEO verifies eligibility and reports approved credits to the department of revenue, and the credit is refundable but may not be carried forward.For tax periods commencing on or after July 1, 2027, exempts from tax the storage, use, or consumption of construction and building materials by or on behalf of a common carrier by rail operating in interstate or foreign commerce when the storage, use, or consumption of the construction and building materials is pursuant to a contract with the state, a political subdivision of the state, or a special district that allows the contracting government to use the railroad's property or tracks for public passenger rail service;Extends the expiring sales and use tax exemption for wood from salvaged trees killed or infested in Colorado by mountain pine beetles or spruce beetles prior to the calendar year commencing on January 1, 2031;Repeals the sales and use tax exemption for property used in space flight, effective January 1, 2027, and reinstates the exemption beginning January 1, 2030;Change from 2% to 1.5% the allowance to cover losses in transit and in unloading gasoline or special fuel and repeals the 0.5% allowance for the costs of collecting the gasoline or special fuel excise tax and for uncollectible bad debts for tax periods beginning on or after January 1, 2027;Repeals the 3% deduction for collecting and remitting the tax on the inventory of cigarette wholesalers for tax periods beginning on or after January 1, 2027;Repeals the 0.4% discount on the face value of tax stamps affixed to packages containing cigarettes for tax periods beginning on or after January 1, 2027;Repeals the 1.6% discount for expenses in the collection and remittance of the tax on the sale, use, consumption, handling, and distribution of tobacco for tax periods beginning on or after January 1, 2027;Repeals the 1.1% discount for expenses in the collection and remittance of the nicotine product distributors tax for tax periods beginning on or after January 1, 2027;Allows an income tax credit to a taxpayer who places a new renewable energy investment in service on or after January 1, 2027, and provides a 14-year carryover of any amount of the credit not used to offset the income taxes otherwise due; except that, beginning in the tax year commencing on January 1, 2027, a taxpayer is not allowed a credit with respect to a qualified investment in a commercial truck, truck tractor, tractor, or semitrailer with a gross vehicle rating of at least 54,000 pounds that is designated as Class A personal property pursuant to statute;Provides that on or after January 1, 2027, a taxpayer with more than 50 business facility employees during an income tax year is ineligible for the new enterprise zone business employee tax credit in that same income tax year;Requires, beginning January 1, 2027, a taxpayer to make at least $150,000 in expenditures in research and experimental activities to be eligible for the enterprise zone research and experimental activities tax credit;Modifies the enterprise zone vacant building rehabilitation income tax credit so that the credit only applies to buildings that have been unoccupied for any 135 calendar days within the 180 calendar days preceding when the rehabilitation is placed in service and is available in an amount equal to 25% of the aggregate qualified expenditures per building or $200,000 per building, whichever is less;Beginning on January 1, 2028, provides that a resident individual is allowed an earned income tax credit that equals the applicable percentage, as set forth in statute, of the amount the individual would be have been allowed under the internal revenue code;Removes Liechtenstein as a jurisdiction recognized as a tax shelter by the state and requires the department of revenue to engage a contractor to study whether the countries currently listed as tax shelters should remain designated as tax shelters;Requires the state treasurer to transfer all money in the commercial vehicle enterprise tax fund to the Colorado economic development fund on July 1, 2027;Requires the state treasurer to transfer the remainder of the penalty assessed for certain traffic violations that is not transferred to local jurisdictions to the general fund on or after July 1, 2027;Extends the residential energy storage system income tax credit to December 31, 2029; andProvides that the film festival incentive tax credit begins on January 1, 2026, instead of January 1, 2027, and ends on December 31, 2035, instead of December 31, 2036.     For the 2026-27 state fiscal year, the act makes the following appropriation adjustments to the department of health care policy and financing:$52,560 decrease from the general fund and a $52,560 increase from cash funds for medical and long-term care services for Medicaid eligible individuals;$21,024 increase from the primary care fund for the primary care fund program; and$332 decrease from the general fund and a $332 increase from the children's basic health plan trust fund for children's basic health plan medical and dental costs.     $38,432 is appropriated from the general fund to the department of revenue for tax administration system support and personal services.     $25,000 is appropriated from the general fund to the office of the governor for use by economic development programs.     $996,276 is appropriated from the preschool programs cash fund to the department of early childhood for support of the universal preschool program.     $35,741 is appropriated from various cash funds to the department of public health and environment for tobacco education, cancer and cardiovascular disease grants, and transfers to the general fund.     $333 is appropriated from the general fund exempt account to the department of public health and environment for immunization operating expenses.     The act takes effect upon passage; except that the appropriation adjustments to the department of health care policy and financing take effect only if the annual general appropriation act for the 2026-27 state fiscal year becomes law, and certain appropriation decreases are subject to the available amounts in the annual general appropriation act.(Note: This summary applies to this bill as enacted.)

The act sets forth a process for a person in prison to petition within the next 3 years for resentencing and for a court to impose a new sentence if the petitioner is 60 years old or older at the time of filing the petition and has served at least 20 calendar years incarcerated for the offense. A person is not eligible to petition if the person is incarcerated as a result of conviction for a sex offense, human trafficking, an offense that resulted in a sentence to life imprisonment without the possibility of parole, an offense for which the victim was a child younger than 12 years old, or an offense against a first responder engaged in the performance of their duties.     At the hearing on the petition, the petitioner has the burden to show by a preponderance of the evidence that the petitioner no longer presents an identifiable danger to the safety of any person or the community and that there is good cause for the court to modify the sentence. Upon the court finding that the petitioner has met their burden, the petitioner is permitted to file a motion for reconsideration and reduction of the initial sentence pursuant to the Colorado rules of criminal procedure. At the hearing on the motion, the court shall determine and impose the appropriate sentence.     If a person in prison is not eligible for resentencing pursuant to the act, the district attorney's office that prosecuted the offense resulting in the conviction may petition the court requesting that the court grant post-conviction relief. If the district attorney's office petitions the court, the same procedures apply as if an eligible person petitioned.     The act appropriates $50,840 to the judicial department for use by the public defender and $50,326 to the department of corrections for use by community services, and reduces the appropriation in the annual general appropriation act for the 2026-27 state fiscal year to the department of corrections for payments to local jails by $168,980.(Note: This summary applies to this bill as enacted.)

The act implements the recommendation of the Colorado office of policy, research, and regulatory reform in the department of regulatory agencies in its sunset review and report by continuing the regulation of hemodialysis clinics and technicians for 11 years, until September 1, 2037.(Note: This summary applies to this bill as enacted.)

In current law, the Colorado bureau of investigation (bureau) must remain open 12 hours a day, every calendar day except Christmas and Thanksgiving, to transmit requests for a background check to the national instant criminal background check system and search other databases. The act allows the bureau to determine its own hours of operation that best meet its business needs to timely transmit the background check requests. The act requires the bureau to immediately place in the processing queue a request for a background check and accept requests for a background check every calendar day except Thanksgiving and Christmas. Additionally, the act requires the bureau to submit a report every year to the house of representatives judiciary committee and the senate judiciary committee describing background check processing times, operating hours, system outages, and actions taken by the bureau to improve efficiency.(Note: This summary applies to this bill as enacted.)

The act requires an entity that requires an individual to provide a social security number for a background check for a non-employment-based educational opportunity to accept an individual's taxpayer identification number in lieu of a social security number, including in clinical educational experiences for health-related academic programs, subject to certain exceptions.     A licensed or certified hospital or covered school, or a state institution of higher education or local district college that offers a non-employment-based educational opportunity that involves work with a vulnerable population, shall accept either an applicant's taxpayer identification number or a fingerprint-based background check in lieu of a social security number.     An applicant for a non-employment-based educational opportunity that involves work with a vulnerable population at a licensed or certified hospital or covered school, or a state institution of higher education or local district college, is permitted to have their fingerprints taken by a local law enforcement agency or an entity approved by the Colorado bureau of investigation for taking fingerprints for the purpose of a background check. A licensed or certified hospital or covered school, or state institution of higher education or local district college, must determine who pays the fee for the fingerprint-based background check.     The attorney general is authorized to bring a civil action to enforce the provisions of the act. An entity that violates this act is subject to a civil penalty of $2,000 for the first violation and $5,000 for each subsequent violation.(Note: This summary applies to this bill as enacted.)

The act creates a statutory cause of action for a person who has their federal constitutional rights violated by another person who, acting under color of law, is participating in civil immigration enforcement. A person who violates the United States constitution while participating in civil immigration enforcement and whose conduct was the proximate cause of violating another person's constitutional rights is liable to the person whose rights are violated for legal or equitable relief or any other appropriate relief. The action must be commenced within 2 years after the cause of action accrues.     The act appropriates $125,604 to the department of law from the legal services cash fund to provide legal services for the department of personnel.(Note: This summary applies to this bill as enacted.)

The act requires a health insurance carrier that provides prescription drug benefits to require that:The utilization review requirements, including prior authorization and step therapy, for a non-opioid drug prescribed and approved by the federal food and drug administration (FDA) for the treatment or management of chronic or acute pain (non-opioid pain management drug) are no more restrictive than the least restrictive utilization review requirements for opioid drugs prescribed for the treatment or management of chronic or acute pain; andThe cost-sharing, copayment, or deductible for a non-opioid pain management drug is not greater than the cost-sharing, copayment, or deductible for an opioid drug prescribed for the treatment or management of chronic or acute pain.     The act requires each individual and small group health benefit plan issued or renewed on or after January 1, 2027, and each large employer health benefit plan issued or renewed on and after January 1, 2028, to ensure there is at least one non-opioid pain management drug available as a clinically appropriate alternative for an opioid pain management drug. If the division of insurance determines that coverage for a non-opioid pain management drug offered by individual and small group health benefit plans requires state defrayal of the cost of coverage, the requirement to make a non-opioid pain management drug available is inoperative.     The state employee health benefit plan is excluded from the requirements of the act.     The act appropriates $15,415 to the department of regulatory agencies for use by the division of insurance to implement the act.(Note: This summary applies to this bill as enacted.)

For purposes of the 'Victim Rights Act', the act prohibits a defendant or alleged offender in the underlying case from being the 'lawful representative' of a victim or the victim's designee if the victim is a child or an at-risk adult.     The act creates new rights for a victim under the 'Victim Rights Act', including the right to:Be notified by the district attorney if the district attorney receives a notice that a crime laboratory employee engaged in a wrongful action that includes a crime against the victim and a notice that an evidentiary hearing on post-conviction petition for relief is held;Request to be referred to by an abbreviation, pseudonym, initials, or another preferred name during hearings; andBe heard at a restitution assessment hearing.(Note: This summary applies to this bill as enacted.)

The act allows the joint technology committee (JTC), within 90 days after the day that the chief information security officer of the office of information technology (security officer) files a written information technology security compliance report (compliance report) with the JTC as required by the act, to vote to request that the legislative audit committee direct the state auditor to conduct a special information technology security audit (IT security audit) of the office of information technology (OIT) if the compliance report indicates that one or more audit recommendations made by the state auditor is unresolved 2 or more years past the implementation date for the audit recommendation or if a material discrepancy exists between a representation in the compliance report and a previous audit finding.     If the JTC votes to request an IT security audit and if the legislative audit committee votes to direct the audit, the act requires:The state auditor to conduct the IT security audit;The state auditor to obtain input from OIT when the state auditor determines the scope and boundaries of the audit;The state auditor to submit the IT security audit report to the legislative audit committee, the JTC, the joint budget committee, and the governor; andOIT to reimburse the state auditor for the auditor's costs incurred in completing the IT security audit.     The act requires OIT to establish, maintain, keep, update, and make available to state agency information technology leadership and the members of the JTC a list of all active information technology vendor contracts for state agencies.     The act specifies that, except in the case of an information technology security emergency, OIT shall not publish or implement a technical information technology standard, and that the standard is void, unless the standard:Was publicly posted; andReceived approval from the security officer if the standard relates to security, access controls, or the handling of data.     The act requires OIT to ensure that, if an information technology contract provides ongoing service and delivery to Coloradans, the contract maintains current architecture diagrams that are updated at least annually.     The act prohibits the chief information officer from delegating a duty, responsibility, or power of the security officer.     The act requires the security officer to submit 2 annual reports to the JTC. The first report is a written compliance report that includes OIT's current compliance status with applicable security standards; all open audit recommendations regarding OIT made by the state auditor and the date on which each recommendation was made; and a timeline for remediation and a mitigation plan or compensation controls for each open audit recommendation made by the state auditor.     The second report is a written statewide information technology security risk report (security risk report) that assesses the overall security risk posture of state agency information technology systems. To support the preparation of the security risk report, the security officer may conduct evaluations of state agency information technology systems, including penetration testing, vulnerability scanning, configuration evaluations, and vendor and system reviews. Each state agency shall provide to the security officer, upon request, the access and information necessary to conduct evaluations of state agency technology systems, including system access, product information, and architecture information.     The act requires the security officer, or the chief information officer if the security officer is unavailable, to perform the duties and uphold the responsibilities assigned to the security officer pursuant to law.(Note: This summary applies to this bill as enacted.)

Beginning in state fiscal year 2027-28, the act requires the department of public safety (department) to submit a budget request for community corrections and to include in its budget request information regarding projected community corrections program needs, including certain data points and analysis related to residential and nonresidential bed capacity, the per diem reimbursement rate for each bed type, and other guideposts related to community corrections appropriations.     The department must include information on the budget request in its yearly 'SMART Act' hearing.(Note: This summary applies to this bill as enacted.)