Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
REREVISED
This Version Includes All Amendments
Adopted in the Second House
LLS NO. 22-0202.02 Ed DeCecco x4216
HOUSE BILL 22-1010
House Committees Senate Committees
Education Finance
Finance Appropriations
Appropriations
A BILL FOR AN ACT
C
ONCERNING AN INCOME TAX CREDIT FOR ELIGIBLE EARLY101
CHILDHOOD
EDUCATORS, AND IN CONNECTION THEREWITH,102
MAKING AN APPROPRIATION .103
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov/
.)
Early Childhood and School Readiness Legislative
Commission. For 5 income tax years, the bill creates a refundable income
tax credit for an eligible early childhood educator who:
! Has an adjusted gross income below specified thresholds;
and
SENATE
3rd Reading Unamended
May 5, 2022
SENATE
Amended 2nd Reading
May 4, 2022
HOUSE
3rd Reading Unamended
April 18, 2022
HOUSE
Amended 2nd Reading
April 14, 2022
HOUSE SPONSORSHIP
Sirota and Van Beber, Kipp, Amabile, Bacon, Bernett, Bird, Boesenecker, Caraveo,
Duran, Esgar, Exum, Froelich, Garnett, Gonzales-Gutierrez, Gray, Herod, Jodeh, Kennedy,
Lindsay, Lontine, McCluskie, McCormick, McLachlan, Michaelson Jenet, Roberts, Snyder,
Tipper, Titone, Valdez A., Weissman, Woodrow, Young
SENATE SPONSORSHIP
Buckner and Kirkmeyer, Story, Bridges, Fenberg, Fields, Ginal, Hinrichsen, Jaquez
Lewis, Lee, Moreno, Pettersen, Zenzinger
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. ! For at least 6 months of the taxable year, holds an early
childhood professional credential and is either the head of
a family child care home or is employed with an eligible
early childhood education program or a family child care
home.
The bill specifies that an early childhood education program must
have achieved at least a level 2 quality rating under the Colorado shines
quality rating and improvement system and either have fiscal agreements
with the Colorado child care assistance program or meet the federal early
head start or head start standards for a program. The amount of the credit
is dependent on the eligible early childhood educator's credentialing level
and is annually adjusted for inflation.
The department of human services, or a successor department, is
required to provide the department of revenue with an electronic report
of each individual who held an early childhood professional credential
during the previous calendar year for which the credit is allowed.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. Legislative declaration. (1) The general assembly2
hereby finds and declares that:3
(a) Demand for early childhood educators and directors is4
expected to increase by nearly twenty-five percent over the next ten years,5
a rate that is even faster anticipated growth than for kindergarten through6
twelfth grade educators, and the growth rates for early childhood7
professionals are high everywhere, but are double in rural counties8
compared to urban counties and highest in frontier counties;9
(b) The early care and education sector is comprised almost10
exclusively of women, forty percent of whom are people of color, and11
failure to invest in this profession undermines the economic opportunity12
of early educators and their ability to support the education of the children13
in their classroom;14
(c) These educators represent the most racially diverse sector of15
the teaching workforce, compared to kindergarten through twelfth grade16
1010-2- and postsecondary education, but early educators are among the1
lowest-paid professionals in every state, including Colorado;2
(d) On average, early childhood educators earn less than half of3
the salary of kindergarten teachers and over one-third report receiving4
subsidies from public assistance programs to make ends meet;5
(e) Low pay and instability in the early childhood sector contribute6
to high turnover rates with half of all early childhood education7
professionals changing jobs within three years;8
(f) The COVID-19 pandemic has exacerbated the challenges9
facing the recruitment, retention, and professional development of the10
early childhood workforce at a time when the need for access to early care11
and education is acute for working families, and women in particular, to12
be able to enter the workforce; and13
(g) Investments in the early care and education workforce have a14
significant return on investment with every dollar invested in the early15
care and education sector resulting in two dollars and twenty-seven cents16
in output in the state economy and every job created in the early care and17
education sector resulting in an additional nearly one and one-half new18
jobs in the state economy.19
(2) Now, therefore, the general assembly declares that supporting20
the early childhood workforce with a targeted tax credit can support21
stability in the industry and, in turn, support working families, child22
development, and economic growth.23
SECTION 2. In Colorado Revised Statutes, add 39-22-543 as24
follows:25
39-22-543. Early childhood educator income tax credit - tax26
preference performance statement - legislative declaration -27
1010
-3- definitions - repeal. (1) (a) T HE GENERAL ASSEMBLY FINDS AND1
DECLARES THAT:2
(I) T
HE BENEFITS OF QUALITY CHILD CARE AND EARLY CHILDHOOD3
EDUCATION ARE WELL DOCUMENTED AND A STRIKING CONNECTION EXISTS4
BETWEEN CHILDREN 'S LEARNING EXPERIENCES WELL BEFORE5
KINDERGARTEN AND THEIR LATER SCHOOL SUCCESS ;6
(II) S
MALL BUSINESS OWNERS AND PARENTS WHO RELY ON CHILD7
CARE TO WORK WOULD ALSO EXPERIENCE LOWER TURNOVER IN CHILD8
CARE STAFF WHEN EARLY CHILDHOOD EDUCATORS EXPERIENCE BETTER9
ECONOMIC STABILITY; AND10
(III) W
HEN EARLY CHILDHOOD EDUCATORS IMPROVE THE QUALITY11
OF THEIR EDUCATION BY RECEIVING EARLY CHILDHOOD PROFESSIONAL12
CREDENTIALS OR ATTAINING HIGHER CREDENTIAL LEVELS , IT IMPROVES13
THE QUALITY OF CHILDREN'S EARLY LEARNING EXPERIENCES.14
(b) I
N ACCORDANCE WITH SECTION 39-21-304 (1), THE PURPOSE OF15
THIS TAX EXPENDITURE IS TO:16
(I) I
NDUCE CERTAIN DESIGNATED BEHAVIOR BY TAXPAYERS ,17
WHICH IN THIS INSTANCE IS FOR EARLY CHILDHOOD EDUCATORS TO18
RECEIVE AN EARLY CHILDHOOD PROFESSI ONAL CREDENTIAL OR TO ATTAIN19
HIGHER CREDENTIAL LEVELS; AND20
(II) P
ROVIDE TAX RELIEF FOR EARLY CHILDHOOD EDUCATORS .21
(c)
THE GENERAL ASSEMBLY AND THE STATE AUDITOR SHALL22
MEASURE THE EFFECTIVENESS OF THE CREDIT IN ACHIEVING THE PURPOSE23
SPECIFIED IN SUBSECTION (1)(b)(I) OF THIS SECTION BASED ON A24
COMPARISON OF THE NUMBER OF EARLY CHILDHOOD PROFESSIONAL25
CREDENTIALS AT THE VARIOUS LEVELS BEFORE AND WITH THE CREDIT .26
(d) T
HE GENERAL ASSEMBLY AND THE STATE AUDITOR SHALL27
1010
-4- MEASURE THE EFFECTIVENESS OF THE CREDIT IN ACHIEVING THE PURPOSE1
SPECIFIED IN SUBSECTION (1)(b)(II) OF THIS SECTION BASED ON THE2
NUMBER OF CREDITS THAT ARE CLAIMED .3
(2) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE4
REQUIRES:5
(a) "D
EPARTMENT" MEANS THE DEPARTMENT OF REVENUE .6
(b) "E
ARLY CHILDHOOD PROFESSIONAL CREDENTIAL " MEANS THE7
EARLY CHILDHOOD PROFESSIONAL CREDENTIALS ISSUED BY THE8
DEPARTMENT OF EDUCATION , OR A SUCCESSOR DEPARTMENT , AND9
DESIGNATED AS EARLY CHILDHOOD PROFESSIONAL I, EARLY CHILDHOOD10
PROFESSIONAL II, EARLY CHILDHOOD PROFESSIONAL III, EARLY11
CHILDHOOD PROFESSIONAL IV, EARLY CHILDHOOD PROFESSIONAL V, AND12
EARLY CHILDHOOD PROFESSIONAL VI. 13
(c) "E
LIGIBLE EARLY CHILDHOOD EDUCATOR " MEANS AN14
INDIVIDUAL WHO:15
(I)
HAS A FEDERAL ADJUSTED GROSS INCOME LESS THAN OR EQUAL16
TO SEVENTY-FIVE THOUSAND DOLLARS FOR AN INDIVIDUAL FILING A17
SINGLE RETURN, OR HAS A FEDERAL ADJUSTED GROSS INCOME LESS THAN18
OR EQUAL TO
ONE HUNDRED FIFTY THOUSAND DOLLARS FOR AN19
INDIVIDUAL FILING A JOINT RETURN; 20
21
(II) HOLDS AN EARLY CHILDHOOD PROFESSIONAL CREDENTIAL FOR22
AT LEAST PART OF THE INCOME TAX YEAR FOR WHICH THE CREDIT IS23
CLAIMED; AND24
(III) F
OR AT LEAST SIX MONTHS OF THE INCOME TAX YEAR FOR
25
WHICH THE CREDIT IS CLAIMED, IS EITHER THE LICENSEE OF AN ELIGIBLE26
PROGRAM OR EMPLOYED BY AN ELIGIBLE PROGRAM .27
1010
-5- (d) "ELIGIBLE PROGRAM" MEANS EITHER AN EARLY CHILDHOOD1
EDUCATION PROGRAM AS DEFINED IN SECTION 26-6.5-101.5 (6.5), OR A2
LICENSED FAMILY CHILD CARE HOME . AN ELIGIBLE PROGRAM MUST3
HAVE HELD AT LEAST A LEVEL ONE QUALITY RATING PURSUANT TO THE4
C
OLORADO SHINES QUALITY RATING AND IMPROVEMENT SYSTEM5
ESTABLISHED IN SECTION 26-6.5-106 FOR THE INCOME TAX YEAR FOR6
WHICH THE CREDIT IS
CLAIMED. 7
(e) "F
AMILY CHILD CARE HOME" HAS THE SAME MEANING AS SET8
FORTH IN SECTION 26-6-102 (13).9
(f) "I
NFLATION" MEANS THE ANNUAL PERCENTAGE CHANGE IN THE10
U
NITED STATES DEPARTMENT OF LABOR 'S BUREAU OF LABOR STATISTICS11
CONSUMER PRICE INDEX FOR DENVER-AURORA-LAKEWOOD FOR ALL12
ITEMS PAID BY ALL URBAN CONSUMERS , OR ITS APPLICABLE SUCCESSOR13
INDEX.14
(3) (a) F
OR INCOME TAX YEARS COMMENCING ON OR AFTER15
J
ANUARY 1, 2022, BUT BEFORE JANUARY 1, 2026,
AN ELIGIBLE EARLY16
CHILDHOOD EDUCATOR IS ALLOWED A CREDIT AGAINST THE TAX IMPOSED17
BY THIS ARTICLE 22 IN AN AMOUNT AS SET FORTH IN SUBSECTION (3)(b) OF18
THIS SECTION.19
(b) (I) E
XCEPT AS PROVIDED IN SUBSECTION (3)(b)(II) OF THIS20
SECTION, THE AMOUNT OF THE CREDIT EQUALS , FOR:21 (A) SEVEN HUNDRED FIFTY DOLLARS FOR AN EARLY CHILDHOOD22
PROFESSIONAL I;23
(B) ONE THOUSAND DOLLARS FOR AN EARLY CHILDHOOD24
PROFESSIONAL II; AND25
(C) ONE THOUSAND FIVE HUNDRED DOLLARS FOR AN EARLY26
CHILDHOOD PROFESSIONAL III, EARLY CHILDHOOD PROFESSIONAL IV,27
1010
-6- EARLY CHILDHOOD PROFESSIONAL V, OR EARLY CHILDHOOD1
PROFESSIONAL VI.2
(II) F
OR THE INCOME TAX YEARS COMMENCING ON OR AFTER3
J
ANUARY 1, 2023, THE DEPARTMENT SHALL ADJUST THE CREDIT AMOUNTS4
SET FORTH IN SUBSECTION (3)(b)(I) OF THIS SECTION TO REFLECT5
INFLATION FOR EACH INCOME TAX YEAR IN WHICH THE CREDIT DESCRIBED6
IN THIS SECTION IS ALLOWED.7
(c) E
ACH ELIGIBLE EARLY CHILDHOOD EDUCATOR IS ONLY8
ALLOWED ONE CREDIT PER INCOME TAX YEAR , EVEN IF THE ELIGIBLE9
EARLY CHILDHOOD EDUCATOR EARNS A HIGHER LEVEL EARLY CHILDHOOD10
PROFESSIONAL CREDENTIAL IN THE SAME YEAR . IN SUCH CASE, THE11
ELIGIBLE EARLY CHILDHOOD EDUCATOR 'S CREDIT IS BASED ON THE12
HIGHEST EARLY CHILDHOOD PROFESSIONAL CREDENTIAL ATTAINED13
DURING THE INCOME TAX YEAR . 14
(4) T
HE AMOUNT OF THE CREDIT UNDER THIS SECTION THAT15
EXCEEDS THE ELIGIBLE EARLY CHILDHOOD EDUCATOR 'S INCOME TAXES16
DUE IS REFUNDED TO THE ELIGIBLE EARLY CHILDHOOD EDUCATOR .17
(5) N
O LATER THAN JANUARY 1, 2023, AND EACH JANUARY 118
THEREAFTER THROUGH JANUARY 1, 2026,
THE DEPARTMENT OF HUMAN19
SERVICES, OR A SUCCESSOR DEPARTMENT , SHALL PROVIDE THE20
DEPARTMENT OF REVENUE WITH AN ELECTRONIC REPORT OF EACH21
INDIVIDUAL WHO HELD AN EARLY CHILDH OOD PROFESSIONAL CREDENTIAL22
DURING THE PREVIOUS CALENDAR YEAR FOR WHICH THE CREDIT IS23
ALLOWED. THE DEPARTMENT SHALL INCLUDE THE FOLLOWING24
INFORMATION IN THE REPORT, IF AVAILABLE:25
(a) T
HE NAME OF THE INDIVIDUAL WHO HOLDS THE EARLY26
CHILDHOOD PROFESSIONAL CREDENTIAL ;27
1010
-7- (b) THE INDIVIDUAL'S SOCIAL SECURITY NUMBER OR TAX1
IDENTIFICATION NUMBER;2
(c) T
HE HIGHEST LEVEL OF EARLY CHILDHOOD PROFESSIONAL3
CREDENTIAL HELD BY THE INDIVIDUAL DURING THE YEAR ; AND4
(d) T
HE LENGTH OF TIME THAT THE INDIVIDUAL HELD AN EARLY5
CHILDHOOD PROFESSIONAL CREDENTIAL AT ANY LEVEL .6
(6) T
HIS SECTION IS REPEALED, EFFECTIVE JULY 1, 2030.
7
SECTION 3. Appropriation. (1) For the 2022-23 state fiscal8
year, $156,743 is appropriated to the department of revenue. This9
appropriation is from General Fund. To implement this act, the10
department may use this appropriation as follows:11
(a) $125,991 for use by taxation services for personal services,12
which amount is based on an assumption that the department will require13
an additional 2.0 FTE;14
(b) $21,570 for use by taxation services for operating expenses;15
(c) $4,950 for tax administration IT system (GenTax) support;16
(d) $3,200 for use by the executive director's office for personal17
services; and18
(e) $1,032 for the purchase of document management services.19
(2) For the 2022-23 state fiscal year, $1,032 is appropriated to the20
department of personnel. This appropriation is from reappropriated funds21
received from the department of revenue under subsection (1)(e) of this22
section. To implement this act, the department of personnel may use this23
appropriation to provide document management services for the24
department of revenue.25
SECTION 4. Act subject to petition - effective date. This act26
takes effect at 12:01 a.m. on the day following the expiration of the27
1010
-8- ninety-day period after final adjournment of the general assembly; except1
that, if a referendum petition is filed pursuant to section 1 (3) of article V2
of the state constitution against this act or an item, section, or part of this3
act within such period, then the act, item, section, or part will not take4
effect unless approved by the people at the general election to be held in5
November 2022 and, in such case, will take effect on the date of the6
official declaration of the vote thereon by the governor.7
1010
-9-