Sen. Dominick Moreno

The act creates the "support foster families" license plate for vehicles. A person is qualified to be issued the plate if the person makes a donation to a designated nonprofit organization that meets the act's qualifications. In addition to the normal fees for a license plate, a person must pay 2 additional one-time fees for the issuance of the plate. The fees are credited to the highway users tax fund and the licensing services cash fund, respectively.The act appropriates $14,145 for use by the division of motor vehicles to implement the act.(Note: This summary applies to this bill as enacted.)

The act creates the revenue loss restoration cash fund (fund). The state treasurer is required to transfer $1 billion from the "American Rescue Plan Act of 2021" cash fund to the fund. This amount is a portion of the money that the state receives from the federal coronavirus state fiscal recovery fund that represents the state's revenue loss as calculated under United States department of treasury guidelines.The general assembly may appropriate or transfer money from the fund to a department for the provision of government services, including kindergarten through twelfth grade public education, housing, state employees, asset maintenance, seniors, criminal justice, state parks, agriculture, and transportation infrastructure. On and after January 1, 2022, the general assembly may only appropriate money from the fund through the annual general appropriation act or a supplemental appropriation act. The money in the fund is allocated to be used over the next 3 fiscal years.(Note: This summary applies to this bill as enacted.)

The state controller is required to prescribe a unified system of accounts and prepare financial statements based on systems set forth by the governmental accounting standards board (GASB). Statement number 87 by GASB, which affects state and local government fiscal years after June 15, 2021, requires that a contract that transfers ownership of an asset be accounted for and reported as a financed purchase or sale of an asset, regardless of whether the contract is labeled by the parties as a lease.Effective July 1, 2021, the act replaces the term "lease-purchase agreement", and, as necessary to effectuate the purpose of the act, substantially similar terms, with "financed purchase of an asset or certificate of participation agreement", and, as necessary to effectuate the intent of the act, substantially similar terms, throughout the Colorado Revised Statutes to clarify that, in accordance with GASB requirements, any such state or local public contract is to be accounted for and reported by the state controller as a financed purchase or sale of the underlying asset rather than as a lease.(Note: This summary applies to this bill as enacted.)

Current law defines as a "covered facility" a stationary source of air pollutants that reported in its federal toxics release inventory filing at least one of the following amounts of the following "covered air toxics" in one year:For hydrogen cyanide, 10,000 pounds; For hydrogen sulfide, 5,000 pounds; and For benzene, 5,000 pounds. The act changes the definition of "covered facility" to include specific listed North American industry classification system codes and expands upon the requirements applicable to covered facilities by:Directing the air quality control commission to consider, at least every 5 years, adding new types of covered facilities and covered air toxics; Requiring that a covered facility's outreach to communities near the covered facility be conducted in the 2 most prevalent languages spoken in the communities; and Requiring covered facilities to conduct real-time fenceline monitoring of covered air toxics and to publicly report the results of the monitoring. The act also requires the division of administration in the department of public health and environment to:Establish notification thresholds for covered air toxics, the exceedance of which covered facilities must disclose to the affected community; and Conduct community-based monitoring of covered air toxics in areas near covered facilities and to publicly report the results, and authorizes the division to spend up to $800,000 from the general fund to buy a mobile air-quality monitoring van to use for community-based monitoring. The act appropriates $480,939 from the stationary sources control fund to the department of public health and environment to implement the act, of which $12,761 is reappropriated to the department of law for the provision of legal services to the department of public health and environment and $283,896 is reappropriated to the office of the governor for use by the office of information technology for the provision of information technology services for the department of public health and environment.(Note: This summary applies to this bill as enacted.)

For each of the 2021-22, 2022-23, and 2023-24 state fiscal years, the act requires the general assembly to appropriate $21,090,149 to the department of public health and environment as follows:$10,000,000 for distributions to local public health agencies; and $11,090,149 for disease control and public health response. The appropriation for the 2021-22 fiscal year is from the economic recovery and relief cash fund, which is comprised of money received by the state pursuant to the federal "American Rescue Plan Act of 2021". The appropriations for the 2022-23 and 2023-24 fiscal years will be from the general fund.(Note: This summary applies to this bill as enacted.)

Section 1 of the act defines "cross-pollination", "licensed outdoor marijuana cultivation", "outdoor cultivation", "registered outdoor hemp cultivation", and "volunteer cannabis plant" in connection with the convening of a working group in section 2 to examine measures to minimize cross-pollination between cannabis plants, which working group is required to report its findings and recommendations on or before November 1, 2022, to the legislative committees with jurisdiction over agricultural matters.Section 4 requires the state licensing authority created to regulate and control the licensing of the cultivation, manufacture, distribution, sale, and testing of regulated marijuana to convene a working group on or before November 1, 2021, to examine existing rules and tax laws that apply to the wholesale marijuana cultivation market to explore how the rules and laws could be amended to better position Colorado businesses to be competitive if marijuana is legalized federally. The working group is required to report its findings and recommendations to the executive director of the department of revenue and the general assembly on or before June 1, 2022.Section 5 authorizes the state licensing authority to engage in rule-making on:The implementation, including the process, procedures, requirements, and restrictions, of contingency plans for outdoor marijuana cultivation facilities to ameliorate crop loss due to adverse weather; and Procedures for the conditional issuance of an employee license identification card. Sections 6 and 7 authorize medical marijuana cultivation and retail marijuana cultivation facility licensees with outdoor cultivation facilities, starting January 1, 2022, to file with the state licensing authority a contingency plan for when there is a threat to operations due to an adverse weather event and, if approved, to follow the plan if there is an adverse weather event. The state licensing authority is required to notify a local licensing authority of its approval of a contingency plan and the local licensing authority may require that an applicant for a license include with the license application a contingency plan for the local licensing authority's review and approval.Section 3 defines "adverse weather event" to mean damaging weather, such as drought, freeze, hail, excessive moisture, excessive wind, or tornado, an adverse natural occurrence, such as an earthquake, wildfire, or a flood, or any additional adverse weather event or adverse natural occurrence that the state licensing authority defines by rule.For the 2021-22 state fiscal year, the act appropriates:$104,780 from the industrial hemp registration program cash fund and the marijuana tax cash fund to the department of agriculture for agricultural services for the plant industry division and to purchase legal services, with $21,268 of said amount reappropriated to the department of law for the provision of legal services; and $279,194 from the marijuana cash fund to the department of revenue for use by the specialized business group for marijuana enforcement and for the purchase of legal services, with $31,902 of said amount reappropriated to the department of law for the provision of legal services.(Note: This summary applies to this bill as enacted.)

The act creates the cash fund solvency fund from which the state controller may transfer money to another cash fund for which it is anticipated that there will be a cash deficit. Thereafter, the state controller is required to transfer the same amount of money from the cash fund back to the cash fund solvency fund in one or more installments, which may be over multiple fiscal years. The state controller is required to annually report to the joint budget committee and the office of state planning and budgeting about any transfers made.The act also requires the state treasurer to transfer to the marijuana cash fund $1,805,317 from the marijuana tax cash fund and $1,200,000 from the general fund.(Note: This summary applies to this bill as enacted.)

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.)

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.)