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January 28, 2022 HB 22-1005
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0484
Rep. McCluskie; Will
Sen. Rankin
Date:
Bill Status:
Fiscal Analyst:
January 28, 2022
House Health & Insurance
Louis Pino | 303-866-3556
louis.pino@state.co.us
Bill Topic: HEALTH CARE PRECEPTORS TAX CREDIT
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
This bill modifies and extends the income tax credit for health care preceptors working
in health care professional shortage areas through tax year 2032. It reduces state
revenue and minimally increases state workload over the term for which the tax credit
is extended.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 22-1005
Budget Year
FY 2022-23
Out Year
FY 2023-24
Out Year
FY 2024-25
Revenue General Fund (up to $150,000) (up to $300,000) (up to $300,000)
Expenditures
- - -
Transfers - - -
Other Budget Impacts TABOR Refund (up to $150,000) (up to $300,000) Not estimated
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January 28, 2022 HB 22-1005
Summary of Legislation
Under current law, the state income tax credit for health care preceptors working in health care
professional shortage areas is available through tax year 2022. This bill extends the credit through tax
year 2032.
In addition, the bill modifies the income tax credit by:
allowing up to 300, rather than 200, preceptors to claim the income tax credit;
allowing nonconsecutive days to be counted when determining the eligibility for the income tax
credit;
modifying the definitions of “rural areas,” “preceptorships,” and “primary health care”; and
modifying the certification requirements for taxpayers to claim the income tax credit.
The bill also expands who may offer a preceptorship to include a medical doctor, doctor of osteopathic
medicine, advanced practice nurse, physician assistant, doctor of dental surgery or doctor of dental
medicine, registered nurse, registered dental hygienist, licensed clinical or counseling psychologist,
licensed clinical social worker, licensed professional counselor, licensed marriage and family
therapist, psychiatric nurse specialist, licensed addiction counselor, or certified addiction counselor
working in an outpatient clinical setting who has been licensed in a primary health care field in the
state by the applicable licensing authority.
Finally, the bill expands who may participate in a preceptorship to include individuals matriculating
at any accredited Colorado institution of higher education seeking a degree or certification in a
primary health care field.
Background
The income tax credit for health care preceptors working in health care professional shortage
areas was created pursuant to House Bill 16-1142 and was first available for tax year 2017.
House Bill 19-1088 extended the income tax credit through tax year 2022. The income tax credit is
nonrefundable but may carried forward for five succeeding income tax years.
Under current law, the credit is available for licensed health care professionals who provide
uncompensated personalized instruction, training, and supervision to one or more graduate students
seeking a medical degree at a Colorado institution of higher education. Instruction, training, and
supervision must last at least four weeks during the income tax year in which the credit is claimed. A
qualifying health care professional must be practicing in a designated rural or frontier county and
must provide a certification form with their income tax return certifying that he or she has satisfied
the requirements for the tax credit. The certification form may be provided by an institution of higher
education, hospital, or area health education center.
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January 28, 2022 HB 22-1005
Under current law, the credit is available up to 200 qualifying taxpayers each year and equal to $1,000
per taxpayer. The Department of Revenue (DOR) approves the credits on first-come first-served basis.
Table 2 shows a summary of the income tax credit for health care preceptors working in health care
professional shortage areas for tax years 2017 to 2020. The table shows the number of taxpayers and
amounts claimed, but does not summarize any carry forward amounts. Data from the DOR shows
that less than 100 credits have been approved each year since 2017.
Table 2
Rural and Frontier Health Care Preceptor Credits
Tax Year Number of Taxpayers Amount Claimed
2017 76 $76,000
2018 89 $87,781
2019 92 $90,392
2020 65 $64,211
The Office of the State Auditor (OSA) is required to evaluate all of the state’s tax expenditures at least
once every five years. The OSA published the Rural and Frontier Health Care Preceptor income tax
credit evaluation report on September 2019. The OSA evaluation determined that the Rural and
Frontier Health Care Preceptor income tax credit is meeting its purpose to some extent because some
eligible preceptors are using it, and the credit amount may be a sufficient financial incentive for some
preceptors. The full report can be found here: https://leg.colorado.gov/sites/default/files/2019-
te1_rural_frontier_healthcare_preceptor_credit.pdf.
State Revenue
The bill is expected to reduce General Fund revenue by up to $150,000 in FY 2022-23, up to $300,000
in FY 2023-24, up to $300,000 in FY 2024-25, and by similar amounts through FY 2032-33, when the
credit is set to expire. The decrease for FY 2022-23 represents a half-year impact for tax year 2023 on
an accrual accounting basis. These estimates provide an upper bound for the revenue impact, which
is limited to a maximum 300 taxpayers each year claiming a credit amount of $1,000 each. To the
extent that fewer preceptors participate in the program, the state revenue impact will be less than
estimated. Individual income tax revenue is subject to TABOR.
State Expenditures
The bill minimally increases state workload in the Department of Revenue for tax administration.
Department of Revenue. The bill will increase the number of state income tax credits claimed for tax
years 2023 through 2032, increasing Department of Revenue workload to process tax returns in
FY 022-23 through FY 2032-33. Based on the number of taxpayers who qualify for the credit, the
workload increase is assumed to be minimal and can be accomplished within existing appropriations.
In addition, the extension and modifications in the bill will not require programming changes to the
GenTax system.
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January 28, 2022 HB 22-1005
Other Budget Impacts
TABOR refunds. The bill is expected to decrease the amount of state revenue required to be refunded
to taxpayers by the amounts shown in the State Revenue section above. This estimate assumes the
December 2021 LCS revenue forecast. A forecast of state revenue subject to TABOR is not available
beyond FY 2023-24. Because TABOR refunds are paid from the General Fund, decreased General
Fund revenue will lower the TABOR refund obligation, but result in no net change to the amount of
General Fund otherwise available to spend or save.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State and Local Government Contacts
Counties Health Care Policy and Financing
Higher Education Information Technology
Municipalities Personnel
Revenue
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.