Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 22-1033.01 Jessica Herrera x4218
HOUSE BILL 22-1392
House Committees Senate Committees
Finance
A BILL FOR AN ACT
C
ONCERNING THE EXTENSION OF STATE TAX INCENTIVES AFFECTING101
THE USE OF REAL PROPERTY TO PROMOTE COMMUNITY102
DEVELOPMENT, AND, IN CONNECTION THEREWITH , EXTENDING103
THE CONTAMINATED LAND STATE INCOME TAX CREDIT AND104
PROPERTY TAX EXEMPTION FOR AFFORDABLE HOUSING105
PROJECTS.106
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
.)
Under current law, an affordable housing developer in Colorado
HOUSE SPONSORSHIP
Bird and Lindsay,
SENATE SPONSORSHIP
Moreno,
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. can qualify for state property tax exemptions for 15 years and federal
income tax credits for 30 years. The bill allows affordable housing
projects to receive the Colorado state property tax exemptions for an
extended period of 15 years to match the period available under federal
law.
Under current law, the tax credit for environmental remediation of
contaminated land (commonly referred to as the Brownfield credit) allows
taxpayers to claim income tax credits for voluntary cleanup of
contaminated land, known as brownfield, located in Colorado. Taxpayers
can claim a transferable credit equivalent to 40% of the first $750,000
spent on remediation and 30% of the next $750,000 spent, for a maximum
credit of $525,000 on remediation costs of $1.5 million or more. In
addition, a "qualified entity", which is a county, municipality, or private
nonprofit entity, is allowed an essentially identical transferable expense
amount for expenses incurred in performing approved environmental
remediation that can be transferred to a taxpayer as an income tax credit.
The Colorado department of public health and environment (CDPHE) is
authorized to certify a total of $3 million in both tax credits for each
income tax year. The bill:
! Extends the tax credit, which is set to expire on January 1,
2023, to January 1, 2033, for an additional 10 years;
! Increases the annual total cap on tax credits from $3
million to $7 million for calendar year 2022 and after;
! Expands the definition of "qualified entity" to include
school districts, charter schools, special districts,
institutions of higher education, and other
quasi-governmental entities;
! Allows a taxpayer whose credit is tied to remediation of a
site in a rural community to claim a credit equivalent to
50% of the first $750,000 spent on remediation and 40% of
the next $750,000 spent;
! Eliminates some restrictions that taxpayers have on the
transferability of credits, including a restriction that
requires any transfer to occur within the first 2 years of
receiving the tax credit and the requirement that the
transferee certify that the taxpayer satisfied statutory
requirements; and
! Requires a taxpayer and a transferee of a tax credit or
transferable expense amount to jointly file a copy of the
transfer agreement with CDPHE, specifies that such filing
perfects the transfer, and clarifies that the transferee and
the department of revenue can rely upon the certification by
CDPHE of the ownership and the amount of the tax credit
as being accurate.
HB22-1392
-2- Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 39-3-112, amend2
(3)(c)(II)(A) and (3)(c)(IV)(A) as follows:3
39-3-112. Definitions - residential property - orphanage -4
low-income elderly or individuals with disabilities - homeless or5
abused - low-income households - charitable purposes - exemption -6
limitations. (3) In order for property to be exempt from the levy and7
collection of property tax pursuant to subsection (2) of this section, the8
administrator must find, pursuant to section 39-2-117, that:9
(c) The property is owned:10
(II) (A) With respect to residential structures specified in11
sub-subparagraphs (A), (C), and (D) of subparagraph (II) of paragraph (a)12
of this subsection (3), SUBSECTIONS (3)(a)(II)(A), (3)(a)(II)(C), AND13
(3)(a)(II)(D)
OF THIS SECTION during any compliance period, as defined14
by section 42 (i)(1) of the "Internal Revenue Code of 1986", as amended,15
INCLUDING ANY EXTENDED USE PERIOD PROVIDED UNDER SECTION 42 OF16
THE "INTERNAL REVENUE CODE OF 1986", AS AMENDED, by any domestic17
or foreign limited partnership of which any nonprofit corporation that18
satisfies the provisions of subparagraph (I) of this paragraph (c)
19
SUBSECTION (3)(c)(I) OF THIS SECTION is a general partner and that was20
formed for the purpose of obtaining, and has been allocated, low-income21
housing credits pursuant to section 42 of the "Internal Revenue Code of22
1986", as amended.23
(IV) (A) With respect to elderly or disabled low-income24
residential facilities or low-income household residential facilities, during25
any compliance period, as defined by section 42 (i)(1) of the "Internal26
HB22-1392-3- Revenue Code of 1986", as amended, INCLUDING ANY EXTENDED USE1
PERIOD PROVIDED UNDER SECTION 42 OF THE "INTERNAL REVENUE CODE2
OF 1986", AS AMENDED, by any domestic or foreign limited partnership so3
long as each of the general partners of such limited partnership is a4
for-profit corporation, seventy-five percent or more of the outstanding5
voting stock of which is owned by, and seventy-five percent or more of6
the members of the board of directors of which is elected by, one or more7
nonprofit corporations that satisfy the provisions of subparagraph (I) of8
this paragraph (c) SUBSECTION (3)(c)(I) OF THIS SECTION and so long as9
such limited partnership was formed for the purpose of obtaining, and the10
structure that is owned by such limited partnership has been allocated,11
low-income housing credits pursuant to section 42 of the "Internal12
Revenue Code of 1986", as amended.13
SECTION 2. In Colorado Revised Statutes, 39-22-526, amend14
(1)(a) introductory portion, (1)(b), (1)(c), (1)(d) introductory portion,15
(1)(d)(III), (1)(d)(VII), (1)(d)(VIII), (2)(a) introductory portion, (2)(b),16
(2)(c) introductory portion, (2)(c)(II), (2)(c)(VI), (2)(c)(VII), (2)(d), (3),17
and (4); repeal (1)(d)(V), (1)(d)(IX), (1)(d)(X), (2)(c)(IV), and18
(2)(c)(VIII); and add (3.5) as follows:19
39-22-526. Credit for environmental remediation of20
contaminated land - legislative declaration - definitions - repeal.21
(1) (a) For income tax years commencing on or after January 1, 2014, but22
prior to January 1, 2023 JANUARY 1, 2033, there is allowed a credit23
against the income taxes imposed by this article ARTICLE 22 for any24
approved environmental remediation of contaminated property to any25
taxpayer who meets the following requirements:26
(b) (I) The tax credit allowed in this section must not exceed forty27
HB22-1392
-4- percent of the first seven hundred fifty thousand dollars expended for the1
approved remediation, and must not exceed thirty percent of the next2
seven hundred fifty thousand dollars expended for the approved3
remediation. F
OR INCOME TAX YEARS COMMENCING ON OR AFTER4
J
ANUARY 1, 2022, WITH RESPECT TO APPROVED REMEDIATION OF A SITE5
LOCATED IN A RURAL COMMUNITY , THE AMOUNT OF THE TAX CREDIT6
SHALL NOT EXCEED FIFTY PERCENT OF THE FIRST SEVEN HUNDRED FIFTY7
THOUSAND DOLLARS EXPENDED FOR THE APPROVED REMEDIATION , AND8
MUST NOT EXCEED FORTY PERCENT OF THE NEXT SEVEN HUNDRED FIFTY9
THOUSAND DOLLARS EXPENDED FOR THE APPROVED REMEDIATION . A tax10
credit is not allowed for expenditures exceeding one million five hundred11
thousand dollars on any individual project. 12
(II) A
S USED IN THIS SUBSECTION (1)(b) AND SUBSECTION (2)(b)13
OF THIS SECTION, "RURAL COMMUNITY" MEANS:14
(A) A
MUNICIPALITY WITH A POPULATION OF LESS THAN FIFTY15
THOUSAND PEOPLE THAT IS NOT LOCATED WITHIN THE DENVER16
METROPOLITAN AREA; OR17
(B) T
HE UNINCORPORATED AREA OF ANY COUNTY THAT IS NOT18
LOCATED IN THE DENVER METROPOLITAN AREA AND THAT HAS A TOTAL19
POPULATION OF LESS THAN FIFTY THOUSAND PEOPLE .20
(III) A
S USED IN THIS SUBSECTION (1)(b) AND SUBSECTION (2)(b)21
OF THIS SECTION, "DENVER METROPOLITAN AREA " MEANS ADAMS,22
A
RAPAHOE, BOULDER, AND JEFFERSON COUNTIES, THE CITY AND COUNTY23
OF BROOMFIELD, THE CITY AND COUNTY OF DENVER, AND ALL OF24
D
OUGLAS COUNTY OTHER THAN THE TOWN OF CASTLE ROCK AND THE25
TOWN OF LARKSPUR.26
(c) A credit must be first applied to taxes due or transferred to
27
HB22-1392
-5- another taxpayer pursuant to paragraph (d) of this subsection (1) no later1
than the tax year following the tax year in which the certification is2
provided to the department pursuant to section 25-16-306 (5)(a), C.R.S.3
If the credit allowed by this section exceeds the tax otherwise due, the4
excess credit may be carried forward and claimed on the earliest possible5
subsequent tax return for a period not to exceed five years.6
(d) A taxpayer may transfer all or a portion of a tax credit granted7
pursuant to this subsection (1) to another taxpayer for such other8
taxpayer, as transferee, to apply as a credit against the taxes imposed by9
this article ARTICLE 22 subject to the following limitations:10
(III) For any tax year in which a tax credit is transferred pursuant11
to this paragraph (d), both the taxpayer and the transferee shall file12
written statements with their income tax returns specifying the amount of13
the tax credit transferred. A transferee may only claim a credit transferred14
pursuant to this paragraph (d) if the taxpayer's written statement verifies15
the amount of the tax credit claimed by the transferee. ANY TRANSFEREE16
OF A TAX CREDIT ISSUED UNDER THIS SECTION MAY USE THE AMOUNT OF17
THE TAX CREDITS TRANSFERRED TO OFFSET AGAINST ANY OTHER TAX DUE18
UNDER THIS ARTICLE 22. THE TRANSFEROR AND THE TRANSFEREE OF THE19
TAX CREDITS SHALL JOINTLY FILE A COPY OF THE WRITTEN TRANSFER20
AGREEMENT WITH THE COLORADO DEPARTMENT OF PUBLIC HEALTH AND21
ENVIRONMENT, REFERRED TO IN THIS SECTION AS "CDPHE", WITHIN22
THIRTY DAYS AFTER THE TRANSFER . ANY FILING OF THE WRITTEN23
TRANSFER AGREEMENT WITH CDPHE PERFECTS THE TRANSFER, AND24
CDPHE
SHALL DEVELOP A SYSTEM TO TRACK THE TRANSFERS OF TAX25
CREDITS AND TO CERTIFY THE OWNERSHIP OF TAX CREDITS . A26
CERTIFICATION BY CDPHE OF THE OWNERSHIP AND THE AMOUNT OF TAX27
HB22-1392
-6- CREDITS MAY BE RELIED ON BY CDPHE AND THE TRANSFEREE AS BEING1
ACCURATE, AND NEITHER CDPHE NOR THE DEPARTMENT OF REVENUE2
SHALL ADJUST THE AMOUNT OF TAX CREDITS AS TO THE TRANSFEREE ;3
EXCEPT THAT CDPHE AND THE DEPARTMENT OF REVENUE RETAIN ANY4
REMEDIES THEY MAY HAVE AGAINST THE OWNER .5
(V) The transferee shall submit to the department of revenue a6
form approved by the department establishing that the taxpayer has7
satisfied the requirements of this section. The transferee shall also file a8
copy of the form with the department of public health and environment.9
(VII) A tax credit held by an individual either directly or as a10
result of a donation DISTRIBUTION by a pass-through entity, but not a tax11
credit held by a transferee unless used by the transferee's estate for taxes12
owed by the estate, survives the death of the individual and may be13
claimed or transferred by the decedent's estate.14
(VIII) The transferor of a tax credit transferred pursuant to this15
paragraph (d) SUBSECTION (1)(d) is the tax matters representative in all16
matters with respect to the credit. The tax matters representative is17
responsible for representing and binding the transferees with respect to18
all issues affecting the credit, including the amounts expended for the19
approved remediation, the certificate issued by the department of public20
health and environment, notifications and correspondence from and with21
the department of revenue, audit examinations, assessments or refunds,22
settlement agreements, and the statute of limitations. The transferee is23
subject to the same statute of limitations with respect to the credit as the24
transferor of the credit.25
(IX) Final resolution of disputes regarding the tax credit between26
the department of revenue and the tax matters representative, including27
HB22-1392
-7- final determinations, compromises, payment of additional taxes or1
refunds due, and administrative and judicial decisions, is binding on2
transferees.3
(X) Any person who has claimed a credit or who may be eligible4
to claim a tax credit either as a taxpayer or a transferee may petition the5
department of revenue to change the tax matters representative's6
designation. The executive director shall promulgate rules specifying the7
procedures for a change to the tax matters representative's designation8
when the executive director determines that the tax matters representative9
is unavailable or unwilling to act as the tax matters representative. If the10
department grants the petition, the new tax matters representative shall11
serve in that capacity on and after the date the department grants the12
petition.13
(2) (a) For income tax years commencing on or after January 1,14
2014, but prior to January 1, 2023 JANUARY 1, 2033, there is allowed to15
any qualified entity a transferable expense amount for expenses incurred16
by the qualified entity in performing approved environmental17
remediation. The transferable expense amount may only be transferred to18
a taxpayer to be claimed by the taxpayer as a credit pursuant to the19
provisions of this subsection (2). The transferrable expense amount is20
allowed to any qualified entity that meets the following requirements:21
(b) The transferable expense amount allowed in this section must22
not exceed forty percent of the first seven hundred fifty thousand dollars23
expended by the qualified entity for the approved remediation, and must24
not exceed thirty percent of the next seven hundred fifty thousand dollars25
expended by the qualified entity for the approved remediation. F
OR26
INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2022, WITH27
HB22-1392
-8- RESPECT TO APPROVED REMEDIATION OF A SITE LOCATED IN A RURAL1
COMMUNITY, THE AMOUNT OF THE TRANSFERABLE EXPENSE SHALL NOT2
EXCEED FIFTY PERCENT OF THE FIRST SEVEN HUNDRED FIFTY THOUSAND3
DOLLARS EXPENDED FOR THE APPROVED REMEDIATION , AND MUST NOT4
EXCEED FORTY PERCENT OF THE NEXT SEVEN HUNDRED FIFTY THOUSAND5
DOLLARS EXPENDED FOR THE APPROVED REMEDIATION . A transferable6
expense amount is not allowed for expenditures exceeding one million7
five hundred thousand dollars on any individual project.8
(c) A qualified entity may transfer all or a portion of a transferable9
expense amount allowed pursuant to this subsection (2) to a taxpayer for10
such taxpayer, as transferee, to apply as a credit against the taxes imposed11
by this article ARTICLE 22 subject to the following limitations:12
(II) For any tax year in which a transferable expense amount is13
transferred pursuant to this subsection (2), the qualified entity shall file14
a written statement with the department of revenue on a form approved15
by the department of revenue and the transferee shall file a written16
statement with the transferee's income tax return specifying the amount17
transferred to the transferee to be claimed as a credit. A transferee may18
only claim a credit pursuant to this subsection (2) if the qualified entity's19
written statement verifies the amount of the tax credit claimed by the20
transferee. ANY TRANSFEREE OF A TRANSFERABLE EXPENSE AMOUNT21
ISSUED UNDER THIS SECTION MAY USE THE AMOUNT OF THE22
TRANSFERABLE EXPENSE AMOUNT TRANSFERRED TO OFFSET AGAINST ANY23
OTHER TAX DUE UNDER THIS ARTICLE 22. THE TRANSFEROR AND THE24
TRANSFEREE OF THE TRANSFERABLE EXPENSE AMOUNT SHALL JOINTLY25
FILE A COPY OF THE WRITTEN TRANSFER AGREEMENT WITH CDPHE26
WITHIN THIRTY DAYS AFTER THE TRANSFER . ANY FILING OF THE WRITTEN27
HB22-1392
-9- TRANSFER AGREEMENT WITH CDPHE PERFECTS THE TRANSFER, AND1
CDPHE
SHALL DEVELOP A SYSTEM TO TRACK THE TRANSFERS OF2
TRANSFERABLE EXPENSE AMOUNTS AND TO CERTIFY THE OWNERSHIP OF3
TRANSFERABLE EXPENSE AMOUNTS . A CERTIFICATION BY CDPHE OF THE4
OWNERSHIP AND THE AMOUNT OF TRANSFERABLE EXPENSE MAY BE RELIED5
ON BY THE DEPARTMENT OF REVENUE AND THE TRANSFEREE AS BEING6
ACCURATE, AND NEITHER CDPHE NOR THE DEPARTMENT OF REVENUE7
SHALL ADJUST THE AMOUNT OF TRANSFERABLE EXPENSE AS TO THE8
TRANSFEREE; EXCEPT THAT CDPHE AND THE DEPARTMENT OF REVENUE9
RETAIN ANY REMEDIES THEY MAY HAVE AGAINST THE OWNER .10
(IV) The transferee shall submit to the department of revenue a
11
form approved by the department establishing that the transferee has12
satisfied the requirements of this section. The transferee shall also file a13
copy of the form with the department of public health and environment.14
(VI) A tax credit TRANSFERABLE EXPENSE AMOUNT held by a15
transferee's estate for taxes owed by the estate, survives the death of the16
transferee and may be claimed or transferred by the decedent's estate.17
(VII) The qualified entity that transfers a transferable expense18
amount to be claimed as a credit by a transferee pursuant to this19
subsection (2) is the tax matters representative in all matters with respect20
to the credit. The tax matters representative is responsible for representing21
and binding the transferees with respect to all issues affecting the credit,22
including the amounts expended for the approved remediation, the23
certificate issued by the department of public health and environment,24
notifications and correspondence from and with the department of25
revenue, audit examinations, assessments or refunds, settlement26
agreements, and the statute of limitations.27
HB22-1392
-10- (VIII) Final resolution of disputes regarding the tax credit1
between the department of revenue and the tax matters representative,2
including final determinations, compromises, payment of additional taxes3
or refunds due, and administrative and judicial decisions, is binding on4
transferees.5
(d) For purposes of AS USED IN this subsection (2), "qualified6
entity" means a county, home rule county, city, town, home rule city,7
home rule city and county,
SCHOOL DISTRICT, CHARTER SCHOOL, SPECIAL8
DISTRICT, DISTRICT AUTHORIZED BY ARTICLE 20 OF TITLE 30, ARTICLE 259
OF TITLE 31, AND ARTICLES 41 TO 50 OF TITLE 37, STATE INSTITUTION OF10
HIGHER EDUCATION, QUASI-GOVERNMENTAL ENTITY , OR MUNICIPAL,11
QUASI-MUNICIPAL, OR PUBLIC CORPORATION ORGANIZED PURSUANT TO12
LAW, or a private nonprofit entity that is exempt from the income taxes13
imposed by this article
ARTICLE 22.14
(3) In addition to any other requirements of this section, a15
taxpayer shall submit a claim for a credit and a qualified entity shall16
submit a claim for a transferrable expense amount to the department of17
public health and environment. The department shall issue certificates for18
the claims received in the order submitted. After certificates have been19
issued for credits and transferrable expense amounts in the aggregate20
amount of three million dollars for all taxpayers and qualified entities21
combined for the 2014
TO 2021 calendar years and three
SEVEN million22
dollars for each calendar year thereafter, any claims that exceed the23
amount allowed for the calendar year shall be placed on a wait list in the24
order submitted and a certificate shall be issued for use of the credit or25
transferrable expense amount in the next year for which the department26
has not issued credit certificates in excess of three
OR SEVEN million27
HB22-1392
-11- dollars except that no more than one million dollars in claims shall be1
placed on the wait list for any given calendar year RESPECTIVELY. The2
department shall not issue certificates for any calendar year, including3
certificates placed on a wait list for that year, in an aggregate amount that4
exceeds three
OR SEVEN million dollars RESPECTIVELY. TWO MILLION5
DOLLARS OF THE SEVEN MILLION DOLLAR CAP IS RESERVED ONLY FOR6
PROJECTS IN A RURAL COMMUNITY . THE REMAINING FIVE MILLION7
DOLLARS EACH YEAR MAY BE USED BY RURAL OR NONRURAL8
COMMUNITIES. No claim for a credit or a transferrable expense amount is9
allowed for any income tax year commencing on or after January 1, 2014,10
unless a certificate has been issued by the department pursuant to this11
subsection (3).12
(3.5) I
N ACCORDANCE WITH SECTION 39-21-304 (1), WHICH13
REQUIRES EACH BILL THAT CREATES A NEW TAX EXPENDITURE OR14
EXTENDS AN EXPIRING TAX EXPENDITURE TO INCLUDE A TAX PREFERENCE15
PERFORMANCE STATEMENT AS PART OF A STATUTORY LEGISLATIVE16
DECLARATION, THE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES17
THAT:18
(a) T
HE GENERAL LEGISLATIVE PURPOSES OF THE INCOME TAX19
CREDIT ALLOWED BY THIS SECTION ARE :20
(I) T
O INDUCE CERTAIN DESIGNATED BEHAVIOR BY TAXPAYERS ;21
AND22
(II) T
O PROVIDE TAX RELIEF FOR CERTAIN BUSINESSES OR23
INDIVIDUALS;24
(b) T
HE SPECIFIC LEGISLATIVE PURPOSE OF THE INCOME TAX25
CREDIT ALLOWED BY THIS SECTION IS TO ENCOURAGE VOLUNTARY26
ENVIRONMENTAL REMEDIATION OF CONTAMINATED SITES BY PROVIDING27
HB22-1392
-12- A FINANCIAL INCENTIVE TO MOVE FORWARD WITH COSTLY REMEDIATION1
PROJECTS; AND2
(c) I
N ORDER TO ALLOW THE GENERAL ASSEMBLY AND THE STATE3
AUDITOR TO MEASURE THE EFFECTIVENESS OF ACHIEVING THE PURPOSES4
SPECIFIED IN SUBSECTIONS (3.5)(a) AND (3.5)(b) OF THIS SECTION, CDPHE5
IS REQUIRED TO PROVIDE DATA THAT INDICATES FOR EACH CALENDER6
YEAR HOW MANY PROJECTS QUALIFIED FOR THE CREDIT AND THE NUMBER7
OF CREDIT RECIPIENTS.8
(4) This section is repealed, effective December 31, 2029
9
D
ECEMBER 31, 2039.10
SECTION 3. Safety clause. The general assembly hereby finds,11
determines, and declares that this act is necessary for the immediate12
preservation of the public peace, health, or safety.13
HB22-1392
-13-