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May 2, 2024 HB 24-1240
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated February 29, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0958
Rep. Joseph; Weinberg
Sen. Rich; Exum
Date:
Bill Status:
Fiscal Analyst:
May 2, 2024
Senate Finance
Emily Dohrman | 303-866-3687
emily.dohrman@coleg.gov
Bill Topic: AMERICORPS EDUCATION AWARD TAX SUBTRACTION
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill creates an income tax subtraction for Segal AmeriCorps Education Awards for
tax years 2026 through 2033. The bill reduces General Fund revenue beginning in
FY 2025-26, and increases state expenditures beginning in FY 2026-27.
Appropriation
Summary:
The bill does not require an appropriation.
Fiscal Note
Status:
The fiscal note reflects the reengrossed bill.
Table 1
State Fiscal Impacts Under HB 24-1240
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Revenue General Fund - ($210,000) ($425,000)
Expenditures General Fund - - $40,016
Transfers - - -
Other Budget Impacts General Fund Reserve - - $6,002
TABOR refunds - ($210,000) Not estimated
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May 2, 2024 HB 24-1240
Summary of Legislation
The bill creates an income tax subtraction equal to the amount received from a Segal
AmeriCorps Education Award for tax years 2026 through 2033. Segal AmeriCorps Education
Awards are awarded to AmeriCorps alumni and may be used to pay educational expenses or
repay student loans.
Background
After completing an AmeriCorps term of service, AmeriCorps alumni are eligible to receive a
Segal AmeriCorps Education Award (education award) which may be used to pay current
education expenses or to repay student loans. The maximum amount of the award is equal to
the maximum Pell Grant award for the year in which the term of service is approved. The award
may be less than the maximum for those who served part-time.
All payments from Segal AmeriCorps Education Awards are subject to federal and Colorado
income taxes. The bill provides a state income tax subtraction for the amount awarded from
the Segal Education Award. For FY 2024-25, the maximum Pell grant award is $7,395. For a
taxpayer who claims a deduction of $7,395, income tax liability will be reduced by
$325 ($7,395 x 4.4 percent).
Assumptions
According to the AmeriCorps National Service in Colorado 2023 Year in Review Report,
AmeriCorps members who completed service in Colorado were eligible for $9.3 million in
education awards in 2023. The fiscal note assumes that 90 percent of AmeriCorps alumni will
claim the education awards for which they are eligible, and that alumni who claim the award will
claim the state income tax subtraction in this bill. The fiscal note also assumes that the total
amount of education awards will increase at the same rate as increases in the maximum Pell
grant award.
State Revenue
The bill reduces General Fund revenue by $210,000 in FY 2025-26 (half-year impact) and
$425,000 in FY 2026-27. Revenue will be reduced by similar amounts annually until a final half-
year impact in FY 2033-34, when the subtraction is repealed. The bill reduces individual income
tax revenue, which is subject to TABOR.
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May 2, 2024 HB 24-1240
State Expenditures
The bill increases General Fund expenditures in the Department of Revenue by $40,016 in
FY 2026-27 and by $7,328 per year beginning in FY 2027-28 through FY 2033-34. Expenditures
are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 24-1240
FY 2024-25 FY 2025-26 FY 2026-27
Department of Revenue
GenTax Programming - - $30,128
User Acceptance Testing - - $2,496
Data Reporting - - $7,392
Total Cost $0 $0 $40,016
Computer programming and testing. In FY 2026-27 only, this bill requires expenditures of
$32,624 to program, test, and update database fields in the DOR's GenTax software system.
Programming costs are estimated at $30,128, representing 130 hours of contract programming
at a rate of $231.75 per hour. Costs for testing at the department include $2,496 for 78 hours of
user acceptance testing at a rate of $32 per hour.
Data reporting. Expenditures in the Office of Research and Analysis are required for changes in
the related GenTax reports so that the department can access and document tax statistics
related to the new tax policy. These costs are estimated at $7,392, representing 231 hours for
data management and reporting at $32 per hour.
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. This estimate
assumes the March 2024 LCS revenue forecast. A forecast of state revenue subject to TABOR is
not available beyond FY 2025-26. 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.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
State and Local Government Contacts
Information Technology Personnel Revenue State Auditor
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 the General Assembly website.