Under current law, the department of public health and environment (department) receives pharmaceutical rebates for money it receives based on charges in excess of a federal price agreement related to the state's operation of a drug assistance program to assist individuals with lower incomes who have medical or preventive needs regarding AIDS or HIV (state program). The rebates are designated in statute as donations. The act removes the statutory designation of the rebates as a donation and creates a cash fund into which the rebates are credited for continuous appropriation to the department for the state program. The cash fund is exempted from the statutory limit on uncommitted reserves in a cash fund. (Note: This summary applies to this bill as enacted.)
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For a child or youth who obtains services under the state's medicaid program through the initiation of a dependency and neglect action or juvenile delinquency action resulting in out-of-home placement, the act requires the department of health care policy and financing (department) to assign the child or youth to the managed care entity (MCE) in the county in which the action was initiated. The department shall only change the MCE designation if requested by the county with jurisdiction over the action or the child's or youth's legal guardian. (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 refers a ballot issue to the voters at the November 2020 general election for the following tax changes: To increase the statutory per cigarette tax from 1 cent to 6.5 cents until July 1, 2024, then to 8 cents until July 1, 2027, and thereafter to 10 cents; To increase the statutory tobacco products tax from 20% of the manufacturer's list price (MLP) to 30% of MLP until July 1, 2024, then to 36% of MLP until July 1, 2027, and to 42% thereafter of MLP for tobacco products; To create a tax on nicotine products that is equal to 50% of MLP until July 1, 2024, then 56% of MLP until July 1, 2027, and thereafter 62% of MLP, which is the same tax as the total tax levied on most tobacco products, including the tax from Amendment 35, with the increase; To establish a tax rate for cigarettes, tobacco products, and nicotine products that are modified risk tobacco products approved by the United States department of health and human services that is 50% of the statutory tax rate; To establish a minimum tax for tobacco products that are moist snuff; To expand the cigarette and tobacco products taxes to include delivery sales made by a seller outside of the state directly to a consumer; and To create an inventory tax on cigarettes that is imposed on all stamped cigarettes and unaffixed stamps in a wholesaler or wholesale subcontractor's possession or control at the time of a tax increase that takes place after January 1, 2022. If voters approve the ballot measure, then the state will have the authority to impose these taxes and the rest of the act will be effective. The act also establishes a minimum price for cigarettes that is equal to $7 for a pack and $70 for a carton until July 1, 2024, and $7.50 for a pack and $75 for a carton on and after July 1, 2024, and civil penalties imposed for any person who sells cigarettes for less than the minimum amount. A portion of the sales tax revenue that is estimated to be attributable to the minimum price requirement is transferred from the general fund to the newly created preschool programs cash fund, from which the general assembly may appropriate money to a designated department to be used for an array of preschool education purposes. The new nicotine products tax is modeled after the tobacco products tax. Nicotine products are products that contain nicotine and that are ingested into the body, which at this time is typically through vaping with an electronic cigarette. The excise tax is levied on the sale, use, consumption, handling, or distribution of all nicotine products in the state, and it is imposed on a distributor at the time the product is brought into the state, made here, or shipped or transported to retailers in the state, or the wholesaler or distributor makes a delivery sale. If a distributor fails to pay the tax, then any person or entity in possession of the nicotine products is liable for the tax. To be a distributor of nicotine products, a person must have a license. The license costs $10 per year and requires that the distributor must have a tax license and comply with all of the laws relating to the collection of the tax. Distributors are required to file electronic quarterly returns. Licensees are required to maintain certain records, and retailers are likewise required to maintain records about nicotine products they purchase from a licensed distributor. The department of revenue may share the names and addresses of persons who purchased nicotine products for resale with the department of public health and environment and county and district public health agencies. To account for the fully phased-in increased taxes per cigarette, the discount percentage on cigarette stamps that a cigarette wholesaler may retain for its collection costs is reduced from 4% to .4% and the similar discount for a tobacco products distributor is reduced from 3.33% to 1.6%. A nicotine products distributor will be permitted to retain 1.1% of the taxes collected. The revenue from the new nicotine products tax, the inventory tax, and the additional cigarette and tobacco products taxes is deposited in the old age pension fund and then credited to the general fund in accordance with the state constitution. The state treasurer is required to transfer an amount equal to the total new tax revenue from the general fund to the 2020 tax holding fund (holding fund). For fiscal years beginning prior to July 1, 2023, the bulk of the money in the holding fund will be transferred to the state education fund, and thereafter, to the preschool programs cash fund. In addition, the state treasurer is required to transfer varying amounts of money in different fiscal years from the holding fund to the following funds: The tobacco tax cash fund; The general fund; The housing development grant fund; The eviction legal defense fund; The newly created rural schools cash fund, which will in turn be distributed to small and large rural school districts based on funded pupil counts; and The tobacco education programs fund. The state auditor is required to annually conduct a financial audit of the use of the new tax revenue. (Note: This summary applies to this bill as enacted.)
The act updates Colorado's statutory provisions related to foster care prevention services and supports (prevention services) in the context of the federal "Family First Prevention Services Act", including: Updating the definition of "kin" to ensure that kin are eligible for prevention services; Updating the definition of "qualified individual" to clarify eligibility; Clarifying the elements of reviews of qualified residential treatment program placements (placements) to ensure that the placement of children, juveniles, and youth are reviewed initially by the court and not by the administrative review division; Updating language referring to children to include juveniles and youth to ensure that delinquent youth are also identified as a population that is eligible for prevention services and meet the requirements for placements; Adding information about prevention services and the authority of county departments of human or social services to provide prevention services; Requiring that when a youth is committed to the state department of human services, the court shall make additional findings to ensure the commitment is not the result of a lack of available appropriate placements; Adding requirements to a court to make specific findings when it deviates from the assessor's recommendation of a placement; Setting a new requirement that residential child care facilities must renew licenses annually; and Requiring the existing delivery of the child welfare services task force to make recommendations on the reduction of state reimbursements for certain out-of-home placements on or before December 15, 2020. The act makes the following appropriations for the 2020-21 state fiscal year: $936,412 is reduced from the general fund and increased from the reappropriated funds for the department of human services executive director's office for employment and regulatory affairs; $546,652 is appropriated to the department of human services executive director's office for legal services and the administrative review unit; $91,039 in anticipated federal funds is appropriated to the office of information technology services for Colorado trails and the division of child welfare for administration; $242,250 is appropriated to the office of the governor for department of human services information technology; $38,376 is appropriated to the department of law for department of human services legal services; $211,200 is appropriated to the judicial department for office of the child's representative personal services; and $178,560 is appropriated to the judicial department for respondent parents' counsel personal services.(Note: This summary applies to this bill as enacted.)
An assistance unit that receives a basic cash assistance (BCA) payment from the Colorado works program at any time within one month after the effective date of the act shall receive a one-time $500 supplemental payment in addition to the amount of BCA an assistance unit currently receives. The one-time supplemental payment is not income for the purpose of any publicly funded program. The act prohibits the general assembly from appropriating more than $10 million for the one-time supplemental payments. If the one-time supplemental payment to each assistance unit exceeds $10 million, the one-time supplemental payment must be distributed evenly to each assistance unit. Beginning July 1, 2021, and each fiscal year thereafter, the joint budget committee must review the sustainability of the Colorado long-term works reserve. The act appropriates $8,424,500 to the department of human services from the federal temporary assistance for needy families block grant. (Note: This summary applies to this bill as enacted.)
The act defines "covered air toxics" as hydrogen cyanide, hydrogen sulfide, and benzene. A stationary source of air pollutants that reported in its federal toxics release inventory filing at least one of the following amounts of a covered air toxic for the year 2017 or later is defined as a "covered facility": For hydrogen cyanide, 10,000 pounds; For hydrogen sulfide, 5,000 pounds; and For benzene, 1,000 pounds. "Incidents" are defined as unauthorized emissions of an air pollutant from a covered facility. Each covered facility will: Conduct outreach to representatives of the community surrounding the covered facility to discuss communications regarding the occurrence of an incident; Use reverse-911 to communicate with, and make data available to, the community surrounding the covered facility regarding the occurrence of an incident; Implement reverse-911 within 6 months; and Pay all costs associated with its use of reverse(Note: This summary applies to this bill as enacted.)
Under current law, the general fund reserve requirement is equal to 7.25% of the amount appropriated for expenditure from the general fund for the fiscal year. The act reduces the percentage used to determine the general fund reserve as follows: 3.07% for fiscal year 2019-20; and 2.86% for fiscal years 2020-21 and 2021-22.(Note: This summary applies to this bill as enacted.)
The act temporarily modifies the manner in which limited gaming tax revenues are allocated between the limited gaming fund and the extended limited gaming fund ( i.e. , the portion of limited gaming tax revenues derived from increased hours of operation, enlarged wagering limit, and the addition of craps and roulette, as authorized by Colorado voters with the passage of Amendment 50 in 2008) in order to more equitably address recovery in the years immediately following the global pandemic and economic recession of 2020. The modification ends in the fiscal year following the fiscal year in which total limited gaming tax revenues again equal or exceed the total limited gaming tax revenues collected in state fiscal year 2018-19.(Note: This summary applies to this bill as enacted.)
The act eliminates the requirement that the department of public health and environment (department) assist and staff the stroke advisory board and the Colorado coroners standards and training board. Each board is authorized to accept and expend gifts, grants, and donations to cover the board's direct expenses. The general fund appropriation to the department for use by the health facilities and emergency medical services division is decreased by $44,007. (Note: This summary applies to this bill as enacted.)