HOUSE BILL 23-1121
BY REPRESENTATIVE(S) Bird, Duran, Hamrick, Kipp, Lindsay,
Marshall, Mauro, McLachlan, Snyder, Titone, Velasco;
also SENATOR(S) Hansen and Liston, Kolker, Moreno.
C
ONCERNING THE REPEAL OF INFREQUENTLY USED TAX EXPENDITURES .
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, 10-3-209, repeal
(1)(d)(II), (1)(d)(III), and (1)(g) as follows:
10-3-209. Tax on premiums collected - exemptions - penalties.
(1) (d) (II) Mutual protective associations writing crop hail insurance only
and operating on an advance premium basis shall be exempt from the taxes
provided by this section on that portion of the premium designated to the
loss fund.
(III) There shall be no tax under this section in the case of any policy
issued prior to 1959 by a domestic insurance company organized under the
laws of this state, maintaining its principal place of business in this state,
and having thirty percent or more of its assets invested in bonds or warrants
of this state or of any county, city, town, or district of this state, and other
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. property within this state in which such company is permitted by law to
invest its funds, and the premium of which policy was fixed and is
contractually binding upon the company.
(g) For the purpose of obtaining the exemption provided in
paragraph (d)(III) of this subsection (1), the term "other property within this
state" means: Real estate and tangible personal property within this state;
first mortgages upon real estate within this state; stocks or bonds of
corporations organized under the laws of this state; deposits with banks,
trust companies, savings and loan associations, building and loan
associations, or financial institutions domiciled within this state; stocks or
bonds of foreign or alien corporations which on the date of purchase of such
stocks or bonds have fifty percent or more of their assets invested in this
state; and accounts of agents who are residents of this state.
SECTION 2. In Colorado Revised Statutes, 39-22-304, amend
(3)(d)(I) and (3)(h); and add (3)(d)(IV) as follows:
39-22-304. Net income of corporation - legislative declaration -
definitions - repeal. (3) There shall be subtracted from federal taxable
income:
(d) (I) P
RIOR TO JANUARY 1, 2024, the portion of any gain received
during the taxable year from a qualified sale.
(IV) T
HIS SUBSECTION (3)(d) IS REPEALED, EFFECTIVE DECEMBER 31,
2028.
(h) (I) P
RIOR TO JANUARY 1, 2024, an amount equal to the difference
between the depletion allowance permitted under the internal revenue code
for oil shale and an amount which would be permitted as the depletion
allowance for oil shale if: The percentage depletion rate were twenty-seven
and one-half percent; and the crushing, retorting, condensing, and other
processes by which oil, gas, or both oil and gas are removed from oil shale,
were deemed to be treatment processes considered as mining.
(II) T
HIS SUBSECTION (3)(h) IS REPEALED, EFFECTIVE DECEMBER 31,
2028.
SECTION 3. In Colorado Revised Statutes, repeal 39-22-307 as
PAGE 2-HOUSE BILL 23-1121 follows:
39-22-307. Credit allowed for prior payment of impact
assistance. (1) For income tax years commencing on or after January 1,
1981, there shall be allowed, as a credit against any taxes imposed by this
part 3 on income derived from a new mining, milling, or mining and milling
operation or expansion of an existing mining, milling, or mining and milling
operation, an amount equal to the value of eligible contributions by the
taxpayer made prior to the commencement of operations by the new
operation or by the expansion of an existing operation to assist in solving
the impact problems of units of local government resulting from the
initiation of a new operation or an expansion of an existing operation. The
credit allowed by this section shall be allowed only on a new operation or
an expansion of an existing operation located within Colorado which begins
actual operations subsequent to June 30, 1980. Such credit shall be based
on the ratio of the gross income attributable to such new operation or
expansion to the total Colorado gross income multiplied by the Colorado
income tax liability for the year for which the credit is claimed.
(2) Eligible contributions, for the purpose of such credit, shall
include the donation of property or payments to units of local government
for use in the planning or construction or expansion of public facilities,
limited to roads, schools, water facilities, sewerage facilities, police and fire
protection facilities, and hospitals, which are deemed to be necessitated by
the initiation of a new operation or an expansion of an existing operation.
In order to qualify as an eligible contribution for credit, the following
requirements shall be fulfilled:
(a) Each contribution shall be based on an agreement between the
taxpayer and a unit of local government specifying the need for the
contribution and its nature, value, and purpose. The agreement shall be
submitted for review to each unit of local government that is impacted by
the new operation or the expansion of an existing operation. Each impacted
unit of local government may send comments on the agreement to the
parties to the agreement and the energy impact assistance advisory
committee pursuant to section 34-63-102 (5)(b)(VI).
(b) Each contribution must be determined to be eligible for credit,
after joint submission by the taxpayer and the unit of local government, by
the executive director of the department of local affairs upon the
PAGE 3-HOUSE BILL 23-1121 recommendation of the energy impact assistance advisory committee.
(c) Certification of eligibility for credit of a contribution of a
specified value must be made by the executive director of the department
of local affairs to the executive director of the department of revenue, the
unit of local government, and the taxpayer. Certification of eligibility for
credit shall not be made to the specified value of any contribution
submitted, but to a prorated value of the contribution, if the total of all
claims received by the department of local affairs exceeds one hundred
thousand dollars.
(3) A taxpayer may claim credit against income tax liability during
the first five years of operations by a new operation or an expansion of an
existing operation in the amount of the total value of all contributions
certified as eligible for credit by submitting with the annual declarations and
returns required by section 39-29-112 the certifications of eligibility for
such credit. Any unabsorbed credit may not be claimed as a refund or
applied as a credit to estimated tax.
SECTION 4. In Colorado Revised Statutes, 39-29-107, amend (1),
(2), (3), and (3.1) as follows:
39-29-107. Tax on severance of oil shale - repeal.
(1) (a) (I) P
RIOR TO JANUARY 1, 2024, in addition to any other tax, there
shall be levied, collected, and paid for each taxable year a tax upon the
severance of oil shale as to all such severance occurring on and after
January 1, 1978. Such tax shall be levied against every person engaged in
the severance of oil shale. Subject to the provisions of subsections (2) and
(3) of this section, such tax shall be levied on the gross proceeds from each
commercial oil shale facility at a rate of four percent of such gross
proceeds.
(II) T
HIS SUBSECTION (1)(a) IS REPEALED, EFFECTIVE DECEMBER 31,
2027.
(b) O
N AND AFTER JANUARY 1, 2024, IN ADDITION TO ANY OTHER
TAX
, THERE SHALL BE LEVIED, COLLECTED, AND PAID FOR EACH TAXABLE
YEAR A TAX UPON THE SEVERANCE OF OIL SHALE
. SUCH TAX SHALL BE
LEVIED AGAINST EVERY PERSON ENGAGED IN THE SEVERANCE OF OIL SHALE
.
S
UCH TAX SHALL BE LEVIED ON THE GROSS PROCEEDS FROM EACH
PAGE 4-HOUSE BILL 23-1121 COMMERCIAL OIL SHALE FACILITY AT A RATE OF FOUR PERCENT OF SUCH
GROSS PROCEEDS
.
(2) (a) P
RIOR TO JANUARY 1, 2024, the tax shall only have
application to a commercial oil shale facility one hundred eighty days after
the facility commences commercial production, as follows:
Year Fraction of tax imposed
by subsection (1)
First year 1/4
Second year 1/2
Third year 3/4
Fourth and each succeeding year Entire rate imposed by
subsection (1).
(b) T
HIS SUBSECTION (2) IS REPEALED, EFFECTIVE DECEMBER 31,
2027.
(3) (a) P
RIOR TO JANUARY 1, 2024, the production of the first fifteen
thousand tons per day of oil shale or ten thousand barrels per day of shale
oil, whichever is greater, shall be exempt from the tax.
(b) T
HIS SUBSECTION (3) IS REPEALED, EFFECTIVE DECEMBER 31,
2027.
(3.1) (a) P
RIOR TO JANUARY 1, 2024, the calculation of the daily
production subject to the tax and to the exemption in subsection (3) of this
section shall be determined by dividing the total production of a calendar
month by the total number of days in such month.
(b) T
HIS SUBSECTION (3.1) IS REPEALED, EFFECTIVE DECEMBER 31,
2027.
SECTION 5. In Colorado Revised Statutes, repeal 39-29-107.5 as
PAGE 5-HOUSE BILL 23-1121 follows:
39-29-107.5. Credit allowed for prior payment of impact
assistance. (1) (a) There shall be allowed, as a credit against any taxes
imposed by this article on the severance of minerals or mineral fuels from
or for a new operation from or for which first severance occurs subsequent
to June 30, 1979, an amount equal to the value of approved contributions
by the taxpayer made prior to first severance of such minerals or mineral
fuels to assist in solving the impact problems of units of local government
resulting from the initiation of such new operation.
(b) There shall be allowed, as a credit against any taxes imposed by
this article on the severance of minerals or mineral fuels from or for an
operation which has an increase in production from or for which increased
severance occurs subsequent to June 30, 1980, an amount equal to the value
of approved contributions by the taxpayer made to assist in solving the
impact problems of units of local government or local units of government
locally impacted by the increase in production of an operation.
(c) There shall be allowed, pursuant to an agreement between or on
behalf of the taxpayer and the unit of local government specified in
subparagraph (I) of paragraph (a) of subsection (2) of this section as a credit
against any taxes imposed by this article on the severance of minerals or
mineral fuels, in addition to any amounts determined under paragraphs (a)
and (b) of this subsection (1) and subsection (2) of this section, an amount
equal to three-fourths of one percent per month times the amount of
approved contributions by a taxpayer for each month that any approved
contribution precedes the month in which said approved contribution is
credited against a taxpayer's yearly severance tax liability. Any amounts of
approved contributions credited against a taxpayer's yearly severance tax
liability shall be applied to reduce the amount, if any, of approved
contributions not previously credited, and the additional percentage
provided in this paragraph (c) shall apply solely to said reduced amount of
approved contributions.
(2) (a) Approved contributions, for the purpose of such credits, shall
include the contribution of property or payment of money to units of local
government or local units of government locally impacted, for use in
planning, including financial, architectural, and engineering services,
construction, or expansion of public facilities, including but not limited to
PAGE 6-HOUSE BILL 23-1121 county or municipal roads, schools, recreation facilities, water facilities,
sewage facilities, police and fire protection facilities, and hospitals, which
are deemed to be necessitated by the initiation of a new operation or
increase in production of an existing operation. In addition, subject to the
agreement reached pursuant to paragraph (c) of subsection (1) of this
section, approved contributions may also include any loss sustained by
reason of the sale of any bonds by the taxpayer who purchased such bonds,
the proceeds of which bonds are used in the planning, construction, or
expansion of any such public facilities by a unit of local government or
local unit of government locally impacted, and any loss by reason of the
default on loans made by a taxpayer or satisfaction of a guaranty obligation
of the taxpayer arising out of the issuance of such bonds, whether or not
such bonds are purchased by the taxpayer. Such losses shall be approved
contributions as of the date of the making of a loan, the date of issuance of
the bonds, or the date of entering into the guaranty obligation; except that,
for purposes of the additional credit allowed pursuant to paragraph (c) of
subsection (1) of this section, the date of the approved contribution shall be
the date of default on any such loan, the date of loss on any such bond, or
the date of satisfaction of any such guaranty obligation. In no event shall the
total amount of approved contributions by a taxpayer exceed fifty percent
of the severance tax liability which the taxpayer anticipates will be incurred
during the first ten years of severance from a new operation or fifty percent
of the increased severance tax liability which the taxpayer anticipates will
be incurred during the first ten years of severance from an expanded
existing operation plus the amounts calculated pursuant to paragraph (c) of
subsection (1) of this section. In order for an approved contribution to
qualify for credit, the following requirements shall be fulfilled:
(I) Each contribution shall be based on an agreement between or on
behalf of the taxpayer and a unit of local government or local unit of
government locally impacted, specifying the need for such contribution and
its nature, value or amount, and purpose;
(II) Each contribution must be acted upon for credit and, if
approved, a certificate of eligibility issued, within ninety days after joint
submission by the taxpayer and the unit of local government, or local unit
of government locally impacted, by the executive director of the department
of local affairs upon the recommendation of the energy impact assistance
advisory committee created by section 34-63-102 (5)(b), C.R.S., and failure
to act upon the eligibility within said ninety days shall be deemed as
PAGE 7-HOUSE BILL 23-1121 approval and certification of the contribution; and
(III) Certification of eligibility for credit of a contribution of a
specified value or amount must be transmitted by the executive director of
the department of local affairs to the executive director of the department
of revenue, the unit of local government or local unit of government locally
impacted, and the taxpayer.
(b) In the event that the taxpayer purchases any bonds relating to
public facilities as provided in this subsection (2) or makes any loans or
guaranty arising out of the issuance of such bonds, the contribution, for
purposes of subparagraphs (I) and (II) of paragraph (a) of this subsection
(2), shall be the purchase price of any bonds purchased, the face value of
any bonds guaranteed, or the amount loaned; except that the taxpayer shall
be entitled to claim as a credit pursuant to subsection (3) of this section only
the amount of loss on any such bonds, the amount paid in satisfaction of any
such guaranty, or the amount of default on any such bonds.
(c) In order for a loss from the purchase and sale of bonds to qualify
as an approved contribution:
(I) The purchase must arise out of the original distribution of such
bonds; and
(II) The sale of such bonds must be made through a registered
broker; and
(III) The sale must take place within five business days of the
purchase.
(3) A taxpayer shall be entitled to credit against its severance tax
liability in an amount equal to the total of all contributions made and
certified as eligible for credit plus the amounts calculated pursuant to
paragraph (c) of subsection (1) of this section. The taxpayer may claim such
credit by submitting with the annual declarations and returns required by
section 39-29-112 the certifications of eligibility for such credit or evidence
regarding deemed certification, and in the case of losses sustained by reason
of the sale of any bonds purchased by the taxpayer, by reason of satisfaction
of a guaranty obligation of the taxpayer arising out of the issuance of bonds,
or by reason of loans made by the taxpayer, evidence of such losses. The
PAGE 8-HOUSE BILL 23-1121 amount of credit available in any one taxable year, including carry-overs,
shall not exceed the taxpayer's severance tax liability in such year. Any
excess shall be carried over and shall be available as a credit in the next
succeeding year or years subject to the same annual limitation.
(4) For the purposes of this section, minerals or mineral fuels shall
include, but not be limited to, oil shale, crude oil, natural gas, and oil and
gas.
(5) The executive director of the department of local affairs, or his
or her designee; the executive director of the department of natural
resources, or his or her designee; the executive director of the department
of revenue, or his or her designee; and the energy impact assistance
advisory committee created in section 34-63-102 (5)(b)(I), C.R.S., shall
work together with the executive director, or his or her designee, of the
Colorado municipal league, or its successor organization; the executive
director, or his or her designee, of Colorado counties, incorporated, or its
successor organization; representatives of the energy and mineral industry;
and any other stakeholders to determine how best to improve the impact
assistance credit established in this section so that any major infrastructure
needs of communities impacted by the energy and mineral industry are
addressed. The group specified in this subsection (5) shall recommend any
proposed legislation to the agriculture, livestock, and natural resources
committee of the house of representatives and the agriculture, natural
resources, and energy committee of the senate, or any successor
committees, no later than January 31, 2009.
SECTION 6. In Colorado Revised Statutes, 39-21-112, amend (1)
as follows:
39-21-112. Duties and powers of executive director. (1) It is the
duty of the executive director to administer the provisions of this article
ARTICLE 21, and he or she THE EXECUTIVE DIRECTOR has the power to adopt,
amend, or rescind such rules not inconsistent with the provisions of this
article
ARTICLE 21, articles 22 to 29 of this title TITLE 39, and article 3 of
title 42 C.R.S., and, subject to other provisions of law relating to the
promulgation of rules, to appoint, pursuant to section 13 of article XII of the
state constitution, such persons, to make such expenditures, to require such
reports, to make such investigations, and to take such other action as he or
she THE EXECUTIVE DIRECTOR deems necessary or suitable to that end. The
PAGE 9-HOUSE BILL 23-1121 executive director shall determine his or her own THE organization and
methods of procedure in accordance with the provisions of this article
ARTICLE 21. For the purpose of ascertaining the correctness of any return or
for the purpose of making an estimate of the tax due from any taxpayer, the
executive director has the power to examine or cause to be examined by any
employee, agent, or representative designated by him or her
THE EXECUTIVE
DIRECTOR
for that purpose any books, papers, records, or memoranda
bearing upon the matters required to be included in the return. In theexercise of rule-making authority as to article 29 of this title, as granted by
the general assembly pursuant to this subsection (1), the executive director,
in interpreting section 39-29-107.5 (1)(c), shall not have authority to reduce
the amount of any approved contributions not previously credited by
applying the amount of any additional percentage previously allowed
pursuant to said section. In the exercise of rule-making authority as to
article 29 of this title TITLE 39, as granted by the general assembly pursuant
to this subsection (1), the executive director may not readopt any rule, or
portion thereof, disapproved on or after July 1, 1982, by the general
assembly pursuant to section 24-4-103 (8)(d) C.R.S.,
without the approval
of the general assembly.
SECTION 7. In Colorado Revised Statutes, 39-29-108, repeal (3)
as follows:
39-29-108. Allocation of severance tax revenues - definitions -
repeal. (3) Effective July 1, 1981, the total gross receipts from any
taxpayer who has previously claimed the full amount of the credit for an
approved contribution under section 39-29-107.5 shall be allocated solely
to the state severance tax trust fund until such time as there is allocated to
such fund, in addition to any current allocation to such fund, an amount
equal to what would have been allocated to such fund during the time the
taxpayer claimed such credit.
SECTION 8. 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 10-HOUSE BILL 23-1121 November 2024 and, in such case, will take effect on the date of the official
declaration of the vote thereon by the governor.
____________________________ ____________________________
Julie McCluskie 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 11-HOUSE BILL 23-1121