HOUSE BILL 22-1149
BY REPRESENTATIVE(S) Lynch and Bird, Bernett, Bockenfeld,
Boesenecker, Exum, Hooton, Lindsay, Lontine, McCluskie, Pelton, Snyder,
Soper, Titone, Valdez A., Valdez D., Ortiz, Ricks, Roberts;
also SENATOR(S) Rankin and Hansen, Bridges, Lee, Zenzinger, Fenberg.
C
ONCERNING THE EXPANSION OF THE ADVANCED INDUSTRY INVESTMENT
TAX CREDIT
, AND, IN CONNECTION THEREWITH , MAKING AN
APPROPRIATION
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, 24-48.5-112, amend
(1)(e) introductory portion, (2)(c), (2)(d), (3)(a), (3)(b), and (6); and add
(1.5) as follows:
24-48.5-112. Advanced industry investment tax credit -
administration - legislative declaration - definitions - repeal. (1) As
used in this section, unless the context otherwise requires:
(e) "Qualified investment" means an investment made at any time
on or after July 1, 2014, but before January 1, 2023
JANUARY 1, 2027, in an
equity security that meets all of the following requirements:
NOTE: This bill has been prepared for the signatures of the appropriate legislative
officers and the Governor. To determine whether the Governor has signed the bill
or taken other action on it, please consult the legislative status sheet, the legislative
history, or the Session Laws.
________
Capital letters or bold & italic numbers indicate new material added to existing law; dashes
through words or numbers indicate deletions from existing law and such material is not part of
the act. (1.5) IN ACCORDANCE WITH SECTION 39-21-304 (1), WHICH REQUIRES
EACH BILL THAT EXTENDS AN EXPIRING TAX EXPENDITURE TO INCLUDE A
TAX PREFERENCE PERFORMANCE STATEMENT AS PART OF A STATUTORY
LEGISLATIVE DECLARATION
, THE GENERAL ASSEMBLY HEREBY FINDS AND
DECLARES THAT
:
(a) T
HE GENERAL LEGISLATIVE PURPOSES OF THE TAX CREDIT
ALLOWED BY THIS SECTION ARE
:
(I) T
O INDUCE CERTAIN DESIGNATED BEHAVIOR BY TAXPAYERS ;
(II) T
O IMPROVE INDUSTRY COMPETITIVENESS ; AND
(III) TO PROVIDE TAX RELIEF FOR CERTAIN BUSINESSES OR
INDIVIDUALS
;
(b) T
HE SPECIFIC LEGISLATIVE PURPOSE OF THE TAX CREDIT
ALLOWED BY THIS SECTION IS TO ENCOURAGE INVESTMENT IN SMALL
BUSINESSES LOCATED IN
COLORADO IN ADVANCED INDUSTRIES , INCLUDING
IN QUANTUM FIELDS
, AND IN PARTICULAR IN SMALL BUSINESSES IN
ADVANCED INDUSTRIES
, INCLUDING IN QUANTUM FIELDS , LOCATED IN A
RURAL AREA OR ECONOMICALLY DISTRESSED AREA OF THE STATE
; AND
(c) THE STATEMENT REQUIRED BY AN APPLICANT ON THE
APPLICATION FOR AN ADVANCED I NDUSTRY INVESTMENT TAX CREDIT SET
FORTH IN SUBSECTION
(2)(e) OF THIS SECTION, AND THE REPORTS THAT THE
OFFICE IS REQUIRED TO SUBMIT PURSUANT TO SUBSECTION
(6) OF THIS
SECTION
, WILL ALLOW THE GENERAL ASSEMBLY AND THE STATE AUDITOR TO
MEASURE THE EFFECTIVENESS OF THE TAX EXPENDITURE
.
(2) (c) A business may request the office to determine whether it is
a qualified small business. Upon receiving the request or upon receipt of an
application for an advanced industry investment tax credit from a qualified
investor, the office shall determine whether the business that is named in the
application or written request is a qualified small business. After
determining the qualifications, the office shall certify the qualified small
business as being eligible to receive qualified investments for purposes of
this section. The certification for a qualified small business that is certified
after July 1, 2014, is valid until January 1, 2023
JANUARY 1, 2027, except
PAGE 2-HOUSE BILL 22-1149 that the certification is revoked if the business no longer meets the
qualifications. A business shall notify the office within thirty business days
from the date that it no longer meets the qualifications. If the certification
is revoked, the office may assess a penalty against the business that is equal
to the amount of the advanced industry investment tax credits authorized
after the date that the business no longer meets the qualifications. The state
treasurer shall deposit the penalty into the state general fund. If the
certification is revoked, subsequent investments in the business do not
qualify for a tax credit. All tax credits issued before the revocation of the
certification remain valid. The office shall not deny any application for a tax
credit on the basis of the revocation of the certification if the investment
was made before the date of the revocation.
(d) As part of the application for an advanced industry investment
tax credit, the applicant and the qualified small business that receives the
investment must each provide written authorization to permit the
department of revenue to provide tax information to the office for the
purpose of determining if there are any misrepresentations on the
application. The authorization is limited to disclosure of income tax
information for the latest two years for which returns were filed with the
department of revenue preceding the date the application is filed and for all
tax years through the year in which the investment was made for which a
return was not filed as of the date of the application. The applicant must
also provide in the written authorization income tax information for all tax
years in which the applicant actually claims a tax credit or carries forward
a tax credit on a return filed with the department of revenue. An applicant
with an individual ownership interest as a co-owner of a business and that
may be entitled to a pro rata share of the tax credit pursuant to section
39-22-532 (5), C.R.S. THAT IS A PARTNERSHIP, LIMITED LIABILITY COMPANY,
S
CORPORATION, OR SIMILAR PASS-THROUGH ENTITY AND THAT MAY
ALLOCATE THE CREDIT AMONG THE PARTNERS
, SHAREHOLDERS, MEMBERS,
OR OTHER CONSTITUENT QUALIFIED INVESTORS PURSUANT TO SECTION
39-22-532 (7) must provide a written authorization with content similar to
the authorization, and in the same manner, as any other applicant is required
to provide. If an applicant or qualified small business fails to comply with
this paragraph (d)
SUBSECTION (2)(d), an applicant is ineligible for a tax
credit.
(3) (a) Subject to the limitations set forth in paragraph (b) of this
subsection (3) SUBSECTION (3)(b) OF THIS SECTION, the office shall
PAGE 3-HOUSE BILL 22-1149 authorize an advanced industry investment tax credit for each qualified
investor who makes a qualified investment in a qualified small business.
The amount of the tax credit is twenty-five percent of the amount of the
qualified investment or thirty
THIRTY-FIVE percent of the qualified
investment if the qualified small business is located in a rural area or
economically distressed area of the state as determined by the office. The
office shall issue a tax credit certificate to the qualified investor for each
qualified investment stating the amount of the tax credit that is authorized
for purposes of section 39-22-532. C.R.S.
A tax credit certificate is
nontransferable. The office shall certify to the department of revenue the
name of each qualified investor who receives a tax credit certificate, the
amount of the tax credit, and other relevant information relating to the tax
credit.
(b) (I) The total amount of the advanced industry investment tax
credits shall not exceed three hundred seventy-five thousand dollars for the
2014 calendar year; and
seven hundred fifty thousand dollars for each
calendar year from 2015 through 2022;
AND FOUR MILLION DOLLARS FOR
EACH CALENDAR YEAR FROM
2023 THROUGH 2026; except that, if the total
amount of the credits for 2018 or a later calendar year
THROUGH 2022 is less
than the maximum amount, then the maximum amount for the next year is
increased by an amount equal to the remaining, unused tax credits from the
prior year. The office shall authorize the tax credits in the order that
applications are received by the office and shall deny any application
received after the limit has been met. The office may partially authorize the
last tax credit that is awarded up to the limit.
(II) The total amount of the tax credit for each qualified investment
shall not exceed fifty
ONE HUNDRED thousand dollars. A qualified investor
may not claim more than one tax credit per qualified small business, but
may be eligible for a tax credit for qualified investments in different
qualified small businesses in the same or a different year.
(6) On November 1, 2017, the office shall submit a first report to the
finance and the business, labor, and economic and workforce development
committees of the house of representatives; to the business, labor, and
technology and the finance committees of the senate, or any successor
committees; and to the joint budget committee summarizing all of the tax
certificates issued since July 1, 2014. At a minimum, the report must
include the amount of the capital invested by qualified investors and the tax
PAGE 4-HOUSE BILL 22-1149 credit that each qualified investor received, a description of the qualified
businesses that received the qualified investment, a projection of the
number of new employees hired by the qualified small businesses as a result
of the qualified investment, the geographic distribution of the jobs, and any
other economic impacts that resulted from the qualified investment.
Notwithstanding section 24-1-136 (11), the office shall submit a second
report on November 1, 2022,
AND A THIRD REPORT ON NOVEMBER 1, 2027,
to the same legislative committees summarizing,
FOR THE SECOND REPORT,
all of the tax certificates issued after January 1, 2018,
AND, FOR THE THIRD
REPORT
, ALL OF THE TAX CERTIFICATES ISSUED AFTER JANUARY 1, 2023. The
second report
AND THIRD REPORTS must include the same information as the
first report.
SECTION 2. In Colorado Revised Statutes, 39-22-532, repeal (5);
and add (7) as follows:
39-22-532. Advanced industry investment tax credit -
definitions. (5) Individuals who are co-owners of a business, including
partners in a partnership and shareholders of an S corporation, may each
claim only their individual pro rata shares of the Colorado innovation
investment tax credit allowed under this section based on their ownership
interests. The total of the tax credits allowed to all such owners may not
exceed the amount that would have been allowed to a sole owner.
(7) IF A QUALIFIED INVESTOR RECEIVING A CREDIT ALLOWED IN THIS
SECTION IS A PARTNERSHIP
, LIMITED LIABILITY COMPANY, S CORPORATION,
OR SIMILAR PASS-THROUGH ENTITY, THE QUALIFIED INVESTOR MAY
ALLOCATE THE CREDIT AMONG ITS PARTNERS
, SHAREHOLDERS, MEMBERS, OR
OTHER CONSTITUENT QUALIFIED INVESTORS IN ANY MANNER AGREED TO BY
SUCH PARTNERS
, SHAREHOLDERS, MEMBERS, OR OTHER CONSTITUENT
QUALIFIED INVESTORS
. THE QUALIFIED INVESTOR SHALL CERTIFY TO THE
COLORADO OFFICE OF ECONOMIC DEVELOPMENT THE AMOUNT OF THE
CREDIT ALLOCATED TO EACH PARTNER
, SHAREHOLDER, MEMBER, OR OTHER
CONSTITUENT QUALIFIED INVESTOR
, AND THE OFFICE SHALL ISSUE CREDIT
CERTIFICATES IN THE APPROPRIATE AMOUNTS TO EACH PARTNER
,
SHAREHOLDER, MEMBER, OR OTHER CONSTITUENT QUALIFIED INVESTOR .
E
ACH PARTNER, SHAREHOLDER, MEMBER, OR OTHER CONSTITUENT
QUALIFIED INVESTOR SHALL BE ALLOWED TO CLAIM SUCH AMOUNT SUBJECT
TO ANY RESTRICTIONS SET FORTH IN THIS SECTION AND SECTION
24-48.5-112.
PAGE 5-HOUSE BILL 22-1149 SECTION 3. Appropriation. For the 2022-23 state fiscal year,
$90,000 is appropriated to the office of the governor for use by economic
development programs. This appropriation is from the general fund and is
based on an assumption that the office will require an additional 0.8 FTE.
To implement this act, the office may use this appropriation for advanced
industries.
SECTION 4. Act subject to petition - effective date. This act
takes effect at 12:01 a.m. on the day following the expiration of the
ninety-day period after final adjournment of the general assembly; except
that, if a referendum petition is filed pursuant to section 1 (3) of article V
of the state constitution against this act or an item, section, or part of this act
within such period, then the act, item, section, or part will not take effect
unless approved by the people at the general election to be held in
PAGE 6-HOUSE BILL 22-1149 November 2022 and, in such case, will take effect on the date of the official
declaration of the vote thereon by the governor.
____________________________ ____________________________
Alec Garnett Steve Fenberg
SPEAKER OF THE HOUSE PRESIDENT OF
OF REPRESENTATIVES THE SENATE
____________________________ ____________________________
Robin Jones Cindi L. Markwell
CHIEF CLERK OF THE HOUSE SECRETARY OF
OF REPRESENTATIVES THE SENATE
APPROVED________________________________________
(Date and Time)
_________________________________________
Jared S. Polis
GOVERNOR OF THE STATE OF COLORADO
PAGE 7-HOUSE BILL 22-1149