Section 2 of the act requires CollegeInvest to provide the department of revenue (department) with a secure electronic report of CollegeInvest account holders who are also Colorado taxpayers who made distributions between January 1, 2017, and January 1, 2021. The department is required to examine a risk-based sample of such taxpayers to substantiate that the distribution was made for authorized purposes. The department is also required to regularly example a risk-based sample of distributions on or after January 1, 2021, and determine if the taxpayer paid the correct amount of income tax. The executive director of the department is required to provide a report of the examinations as part of the department's presentation to its legislative committee of reference.Section 3 of the act modifies how taxable income is determined for individuals for purposes of the state income tax. Specifically, it:Extends the limit on the federal deduction allowed under section 199A of the internal revenue code; Imposes a cap for taxpayers with adjusted gross incomes equal to or exceeding $400,000 on certain itemized deductions claimed under the internal revenue code; Requires individual taxpayers to add amounts of federal taxable income that are equal to the enhanced federal deductions for food and beverage in a restaurant for the 2022 income year (this is also required for corporate taxpayers in section 7 of the act); Repeals, for social security income earned by individuals who are 65 years of age or older that is included in federal taxable income only, the cap on the deduction for pension and annuity income received; and Adds an annually adjusted cap, per taxpayer per beneficiary, on the income tax deduction for contributions made to 529 plans, and requires CollegeInvest to provide the department with a secure electronic report containing specified information for the 529 plans account owners and third-party contributors necessary for the administration of the income tax deduction. Section 4 of the act increases the earned income tax credit to 20% for income tax years commencing on or after January 1, 2022, but before January 1, 2023, and income tax years commencing on or after January 1, 2026. Section 3 also increases the earned income tax credit to 25% for income tax years commencing on or after January 1, 2023, but before January 1, 2026. Finally, section 4 of the act applies the lowered minimum age for individuals without a qualifying child in the federal "American Rescue Plan Act of 2021" to the state credit for income tax years commencing on or after January 1, 2022.Section 5 of the act funds the child tax credit for income tax years commencing on or after January 1, 2022, and allows a child tax credit in the state regardless of the federal requirement that a qualifying child must have a social security number for the federal child tax credit. Section 5 of the act also specifies that if the changes to the federal child tax credit in the "American Rescue Plan Act of 2021" are no longer in effect, the percentages of the state child tax credit are increased.Section 6 of the act modifies the computation of the corporate income tax receipts factor to make it more congruent with combined reporting and also prevents corporations from using tax shelters in foreign jurisdictions for the purpose of tax avoidance.Section 7 of the act functions to prevent corporations from using tax shelters in foreign jurisdictions for the purpose of tax avoidance and additionally modifies how taxable income is determined for C corporations for purposes of the state income tax. Specifically, it requires corporate taxpayers to add amounts of federal taxable income that are equal to the enhanced federal deductions for food and beverage in a restaurant for the 2022 income year.Section 8 of the act limits the state subtraction for certain capital gains incurred by allowing the subtraction to a taxpayer who is required to file a Schedule F, profit or loss from farming, as an attachment to the taxpayer's federal income tax return for the tax year in which the net capital gains arise for the sale of real property, not tangible personal property, that is classified as agricultural land for property tax purposes.Section 9 of the act creates a temporary income tax credit for a business for a percentage of the conversion costs to convert the business to a worker-owned coop, an employee stock ownership plan, or an employee ownership trust.Sections 10 through 13 of the act address the avoidance of income tax by certain captive insurance companies.Section 14 of the act adds an appropriation to:The office of the governor for use by the office of economic development for the administration of the income tax credit for a business converting to a worker-owned coop, an employee stock ownership plan, or an employee ownership trust; and The department of revenue for administration and support.(Note: This summary applies to this bill as enacted.)
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Effective July 1, 2022, the act creates the department of early childhood (new department) to:Provide early childhood opportunities; Coordinate the availability of early childhood programs and services throughout Colorado; Establish state and community partnerships for a mixed delivery of child care and early childhood programs through school- and community-based providers; Prioritize the interests and input of children, parents, providers, and the community in designing and delivering early childhood services and programs; Prioritize the equitable delivery of resources and supports for early childhood; and Unify the administration of early childhood programs and services. The act moves the early childhood leadership commission (commission) to the new department, effective July 1, 2022.The act creates a transition working group (working group), consisting of the co-chairs of the commission and representatives of certain state agencies and the governor's office, and directs the co-chairs of the commission to convene a transition advisory group (advisory group).The act directs the working group, working with a consultant and with the advice of the advisory group, to develop a transition plan (plan) for the coordination and administration of early childhood services and programs by the new department and the departments of education, human services, and public health and environment, including, to the extent necessary, the transition of existing programs and services to the new department. The act includes specific requirements for the plan.The governor's office must submit the plan to the joint budget committee as part of the governor's 2022 budget request, and the working group must submit the plan to the commission for approval. As soon as practicable after the plan is approved, the governor's office must submit the approved plan to the joint budget committee with any necessary budget request amendments. The working group must submit the approved plan to other committees of the general assembly by November 15, 2021, and must meet with the early childhood and school readiness legislative commission by December 1, 2021, to present the plan.The act also directs the working group, working with the consultant and with the advice of the advisory group, to develop recommendations for a new voluntary, universal preschool program (recommendations) to be funded partially by the recently increased sales tax on tobacco and operated by the new department beginning in the 2023-24 school year. The act specifies requirements that the new preschool program must meet. The working group must also convene and work with a subgroup that focuses on issues relating to serving children with disabilities through the new preschool program. The working group must submit the recommendations to the commission for approval and must then submit the recommendations to the joint budget committee and other committees of the general assembly by January 15, 2022.The act requires the governor's office to contract with one or more private entities to consult with the working group in developing and implementing the plan and in developing the recommendations and to analyze the current use of existing early childhood programs in the state.For the 2021-22 fiscal year, to implement the act, there is appropriated from the general fund:$587,500, with the assumption of an additional 3.6 FTE, to the office of the governor; $267,161, with the assumption of an additional 1.2 FTE, to the office of early childhood in the department of human services; and $96,867, with the assumption of an additional 0.9 FTE, to the department of education.(Note: This summary applies to this bill as enacted.)
To be deemed to maintain a home office or regional home office and pay the insurance premium tax at a rate of 1%, the act requires a company to have a minimum percentage of its total domestic workforce in the state. This percentage is 2% for 2022, 2.25% for 2023, and 2.5% for 2024 and thereafter. The act also narrows the tax exemption for annuities considerations. For the purpose of auditing a company's tax statement, the commissioner of insurance may appoint an independent examiner to conduct an examination on behalf of the commissioner.For purposes of imposing the property tax, the act specifies that the actual value of real property reflects the value of the fee simple estate and the actual value of personal property is determined based on the property's value in use, which will be defined by the property tax administrator. The act also increases the per schedule exemption for business personal property from $7,900 to $50,000, adjusted for inflation, and the state is required to reimburse local governments for lost property tax revenue caused by the increase. Assessors are required to provide an estimate of the exempt business personal property along with the certifications to local governments.The state sales and use tax is imposed on the sale and use of tangible personal property. The act codifies the department of revenue rule that the definition of "tangible personal property" includes "digital goods" and specifies that the state sales tax applies to amounts charged for mainframe computer access, photocopying, and packing and crating. Beginning January 1, 2022, a retailer whose total taxable sales were greater than $1 million for a filing period is not permitted to retain any portion of the sales and use tax collected as compensation for the retailer's tax-collection expenses.The act limits the allowable deductions, which are used to determine the taxable amount of oil and gas subject to the severance tax, to direct costs actually paid or accrued by the taxpayer for those purposes. Beginning with the 2022 taxable year, the act phases out the quarterly exemption and the tax credits for the severance tax on coal. The additional revenue that results from changes to the coal severance tax is credited to the just transition cash fund.(Note: This summary applies to this bill as enacted.)
The act transfers $10 million from the general fund to the public school capital construction assistance fund (assistance fund) for the purpose of providing "Building Excellent Schools Today Act" (BEST) grants to fund public school air quality improvement projects. The public school capital construction assistance board (board) is authorized to make the grants and is required to prioritize grant awards based on grant applicants' existing calculated local match requirements for BEST grants, with applicants with the lowest matching money requirements having the highest priority and applicants with the highest matching money requirements having the lowest priority. The board is also required to submit a report about the grants to the general assembly during the department of education's 2022 "State Measurement for Accountable, Responsive, and Transparent (SMART) Government Act" presentation to legislative committees of reference. Notwithstanding the use of existing calculated local match requirements for grant prioritization purposes, the grants are exempted from existing matching money requirements for BEST grants. $10 million is appropriated from the assistance fund to the board for state fiscal year 2020-21, and any of the money not expended before July 1, 2021, is further appropriated to the board for state fiscal year 2021-22 for the same purpose.(Note: This summary applies to this bill as enacted.)
The public employees' retirement association (PERA) board (board) is required to create an exclusion list of all fossil fuel companies in whose stocks, securities, equities, assets, or other obligations PERA has any money or assets directly invested. The board is required to notify any company on the list of its inclusion on the list and of the divestment requirements of the bill. The board is required to periodically update the exclusion list. A company that was included on the exclusion list may request that it be removed from the list on the basis of clear and convincing evidence that it is not currently a fossil fuel company or that it will no longer meet such definition by a certain date. Within 6 months from the completion of the exclusion list, the board is required to issue a determination as to whether divestment from the companies on the exclusion list complies with the board's fiduciary obligations. If the board determines that divestment from any company on the exclusion list does not comply with its fiduciary obligations, the board will remove the company from the exclusion list. Beginning one year after the effective date of the bill, the board is required to: Divest the funds managed by PERA (fund) of any stocks, securities, equities, assets, or other obligations of companies on the exclusion list in which any money or assets of the fund are directly invested; and Cease new direct investments of any money or assets of the fund in any stocks, securities, or other obligations of any company that is a fossil fuel company. The board is required to complete divestment from fossil fuel companies by a specified date. Beginning one year after the effective date of the bill, the board is required to endeavor to ensure that no money or assets of the fund are invested in an indirect investment vehicle unless the board is satisfied that such indirect investment vehicle is unlikely to have in excess of 2% of its assets directly or indirectly invested in fossil fuel companies. The board is required to issue periodic reports to the members of the pension review commission of the general assembly outlining all actions taken to comply with the requirements of the bill. (Note: This summary applies to this bill as introduced.)
The act suspends the administration of state assessments, contingent on receiving a waiver of federal law from the federal department of education, for the following instructional areas and grade levels for the 2020-21 school year:Science for students enrolled in grades 5, 8, and 11; Math for students enrolled in grades 3, 5, and 7; and English language arts for students enrolled in grades 4, 6, and 8. For the 2020-21 school year, the act suspends administration of the social studies assessment for students enrolled in elementary and middle school.The act allows the parent of a student enrolled in a grade for which administration of the English language arts or math assessment is suspended to request through the local education provider in which the student is enrolled that the student participate in the English language arts assessment or the math assessment.The act prohibits a school district from using student academic growth measures or student performance measures when evaluating licensed personnel for the 2020-21 school year.The act requires a school or school district or the state charter school institute to implement the performance plan type that was assigned in the preceding school year. The act also requires the department of education (department), in determining the number of school years that a school or school district or the institute is on performance watch or subject to 2-year review, to exclude the plan types for the 2020-21 and 2021-22 school years and count the plan type for the 2022-23 school year as if it were consecutive to the 2019-20 school year.If required to implement a priority improvement or turnaround plan during the 2020-21 school year on the basis of its plan type for the 2019-20 school year, the act allows a school or school district or the institute to request a plan type for the 2021-22 school year that reflects its level of attainment based on an alternative body of evidence.For the 2020-21 and 2021-22 school years, the act suspends the requirement that the department determine annually the level of attainment for public schools, school districts, the institute, and institute charter schools based on performance indicators.The act reduces the appropriation to the department for the 2020-21 fiscal year.(Note: This summary applies to this bill as enacted.)
The bill suspends the administration of state assessments, contingent on a change to federal law or a waiver of federal law from the federal department of education, for the following instructional areas for the 2020-21 school year: Science administered to students enrolled in grades 5, 8, and 11; Math administered to students enrolled in grades 3 through 8; English language arts administered to students enrolled in grades 3 through 8; and Social studies administered to students enrolled in grades 4 and 7. The bill prohibits a school district from using student academic growth measures or student performance measures when evaluating teachers and principals for the 2020-21 school year. The bill requires a school or a school district to implement the school plan type that was assigned in the preceding school year. The bill requires the department of education, in determining the number of school years that a school or school district is on performance watch, to exclude the 2019-20 and 2020-21 school years, and count the 2021-22 school year as if it were consecutive to the 2018-19 school year. (Note: This summary applies to this bill as introduced.)
Sections 1 and 3 of the act restore, over time, certain business deductions to federal taxable income that were disallowed in Colorado by operation of a department of revenue rule and by House Bill 20-1420. The specific deductions are related to net operating losses, the application of the federal excess business loss rules, interest expenses, and qualified improvement property.The earned income tax credit is equal to a percentage of the federal earned income tax credit. Section 2 allows taxpayers filing with an individual taxpayer identification number to claim the earned income tax credit for income tax years commencing on or after January 1, 2020.(Note: This summary applies to this bill as enacted.)
Section 1 of the act specifies that the act shall be known as the "Tax Fairness Act". Sections 2 and 3 of the act require taxpayers to add to federal taxable income: For income tax years ending on and after the enactment of the March 2020 "Coronavirus Aid, Relief, and Economic Security Act" (CARES Act), but before January 1, 2021, and for income tax years beginning on and after the enactment of the CARES Act, but before January 1, 2021, an amount equal to the difference between a taxpayer's net operating loss deduction as determined under federal law before the amendments made by section 2303 of the CARES Act and the taxpayer's net operating loss deduction as determined under federal law after the amendments made by section 2303 of the CARES Act; For income tax years ending on and after the enactment of the CARES Act, but before January 1, 2021, and for income tax years beginning on and after the enactment of the CARES Act, but before January 1, 2021, an amount equal to a taxpayer's excess business loss as determined under federal law without regard to the amendments made by section 2304 of the CARES Act, but with regard to the technical amendment made in that section of the CARES Act; For income tax years ending on and after the enactment of the CARES Act, but before January 1, 2021, and for income tax years beginning on and after the enactment of the CARES Act, but before January 1, 2021, an amount equal to the amount in excess of the limitation on business interest under federal law without regard to the amendments made by section 2306 of the CARES Act; and For income tax years commencing on or after January 1, 2021, but before January 1, 2023, an amount equal to the deduction for qualified business income for an individual taxpayer who files a single return and whose adjusted gross income is greater than $500,000, and for an individual taxpayer who files a joint return and whose adjusted gross income is greater than $1 million. This federal deduction may be claimed for income tax years commencing prior to January 1, 2026, except that the add-back is not required for a taxpayer who files a schedule F, profit or loss from farming, or successor form, as an attachment to a federal income tax return. Section 4 of the act specifies that for net operating losses incurred after December 31, 2017, the 80% limitation set forth in federal law applies without regard to the amendments made in section 2303 of the CARES Act. The earned income tax credit is equal to a percentage of the federal earned income tax credit. Section 5 of the act increases the percentage from 10% to 15% beginning in 2022. Section 5 also specifies that for income tax years commencing on or after January 1, 2021, taxpayers filing with an individual taxpayer identification number are eligible for the earned income tax credit. Section 6 of the act specifies that the state treasurer shall transfer $113 million on March 1, 2021, and $23 million on March 1, 2022, from the general fund to the state education fund created in section 17 (4) of article IX of the state constitution. Section 7 of the act makes an appropriation. (Note: This summary applies to this bill as enacted.)
The act requires the state board to adopt standards related to Holocaust and genocide studies on or before July 1, 2021. The adoption of standards is conditional on the receipt of gifts, grants, or donations. The act requires each school district board of education and charter school to incorporate the standards on Holocaust and genocide studies adopted by the state board into an existing course that is currently a condition of high school graduation for school years beginning on or after July 1, 2023, if the standards are adopted by the state board on or before July 1, 2023. The act requires the department of education to create and maintain a publicly available resource bank of materials pertaining to Holocaust and genocide courses and programs, which must be available for access by public schools no later than July 1, 2021. (Note: This summary applies to this bill as enacted.)