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May 6, 2022 HB 22-1418
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-1003
Rep. Herod; McCluskie
Sen. Hansen; Zenzinger
Date:
Bill Status:
Fiscal Analyst:
May 6, 2022
House Finance
Louis Pino | 303-866-3556
louis.pino@state.co.us
Bill Topic: EXTENSION OF CERTAIN UNUSED TAX CREDITS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill extends the carry-forward period for unused state job growth incentive and
enterprise zone credits income tax credits set to expire in tax years 2021 through 2025.
The bill will increase state expenditures and reduce state revenue from the current
FY 2021-22 through FY 2026-27.
Appropriation
Summary:
For FY 2022-23, the bill requires an appropriation of $18,412 to the Office of Economic
Development and International Trade.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 22-1418
Current Year
FY 2021-22
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue General Fund (up to $7.5 million) (up to $15.0 million) ($15.0 million)
Total Revenue (up to $7.5 million) (up to $15.0 million) ($15.0 million)
Expenditures General Fund - $18,412 -
Central. Approp. - $3,656 -
Total Expenditures - $22,068 -
Total FTE - 0.2 FTE -
Transfers - - -
Other Budget
Impacts
TABOR Refund (up to $7.5 million) (up to $15.0 million) not estimated
GF Reserve - $2,762 -
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May 6, 2022 HB 22-1418
Summary of Legislation
For businesses that operate in a strategic industry and were disproportionally impacted and
experienced financial hardship caused by the COVID-19 pandemic, the bill extends the carry-forward
period for unused state job growth incentive and enterprise zone credits income tax credits set to
expire in tax years 2021 through 2025. The extension is for five years, and the bill caps the total amount
of tax credits allowed to be carried forward in the extended period at $15.0 million per year. The
extension does not apply to Enterprise Zone Contribution tax credits.
The bill requires the Colorado Economic Development Commission (commission) to establish a
process for reviewing, and approving applications submitted by taxpayers. In addition, the
commission is responsible for ensuring applicants meet certain eligibility requirements.
State Revenue
The bill is expected to decrease General Fund revenue by up to $7.5 million (half-year impact) in the
current FY 2021-22, up to $15.0 million in each year for FY 2022-23 through FY 2025-26, and by up to
$7.5 million in FY 2026-27 (half-year impact). The bill’s actual revenue impact could be lower
depending on the extent to which taxpayers meet the eligibility requirements for the extension. The
bill reduces income tax revenue, which is subject to TABOR.
State Expenditures
The bill increases state expenditures in Office of Economic Development (OEDIT) by $22,068 in
FY 2022-23 only. Expenditures are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 22-1418
FY 2021-22 FY 2022-23 FY 2023-24
Office of Economic Development
Personal Services - $18,412 -
Centrally Appropriated Costs
1
- $3,656 -
Total Cost - $22,068 -
Total FTE - 0.2 FTE -
1
Centrally appropriated costs are not included in the bill's appropriation.
Office of Economic Development. The OEDIT will require $22,068 and 0.2 FTE in FY 2022-23 only to
assist the commission with establishing a process for reviewing, approving applications, and ensuring
applicants meet certain eligibility requirements. The OEDIT is assumed to approve all extensions
before June 30, 2023.
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May 6, 2022 HB 22-1418
Department of Revenue. The DOR currently reviews state job growth incentive and enterprise zone
credits income tax credits. This workload can be accomplished within existing appropriations.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated
with this bill are addressed through the annual budget process and centrally appropriated in the Long
Bill or supplemental appropriations bills, rather than in this bill. These costs, which include employee
insurance and supplemental employee retirement payments, are shown in Table 2.
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 for FY 2022-23 and
for FY 2023- 24. This estimate assumes the March 2022 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.
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve beginning in FY 2022-23. Based
on this fiscal note, the bill is expected to decrease the amount of General Fund held in reserve by the
amounts shown in Table 1, which increases the amount of General Fund available for other purposes.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State Appropriations
In FY 2022-23, the bill requires a General Fund appropriation of $18,412 to the OEDIT and 0.2 FTE.
State and Local Government Contacts
Information Technology OEDIT
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.