Page 1
August 2, 2024 HB 24-1268
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0919
Rep. Weissman; Ortiz
Sen. Exum; Fields
Date:
Bill Status:
Fiscal Analyst:
August 2, 2024
Signed into Law
Elizabeth Ramey | 303-866-3522
elizabeth.ramey@coleg.gov
Bill Topic: FINANCIAL ASSISTANCE FOR CERTAIN LOW -INCOME INDIVIDUALS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
Starting with tax year 2025, the bill ends the property tax, rent, and heat rebate for
persons with a disability and replaces it with an income tax credit. It decreases state
revenue and expenditures starting in FY 2024-25.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The final fiscal note reflects the enacted bill.
Table 1
State Fiscal Impacts Under HB 24-1268
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Revenue General Fund ($3.2 million) ($6.5 million) ($6.7 million)
Total Revenue ($3.2 million) ($6.5 million) ($6.7 million)
Expenditures General Fund ($1,400,123) ($2,561,751) ($2,472,380)
Centrally Appropriated - $26,738 $18,225
Total Expenditures ($1,400,123) ($2,535,013) ($2,454,155)
Total FTE - 1.6 FTE 1.1 FTE
Transfers - - -
Other Budget
Impacts
TABOR Refunds ($3.2 million) ($6.5 million) Not estimated
General Fund Reserve - $23,760 $10,519
Page 2
August 2, 2024 HB 24-1268
Summary of Legislation
Under current law, Colorado residents over the age of 65 and those with a disability are eligible
for a property tax and rent assistance rebate and a heat and fuel expenses rebate, if they meet
certain conditions. These are commonly known as the PTC rebates. Starting in tax year 2025, this
bill ends the PTC rebate for individuals with a disability and replaces it with a refundable income
tax credit. Credit amounts and thresholds for tax year 2025 are shown in Table 2, and are
adjusted thereafter for inflation. Taxpayers who may be eligible for both the PTC rebate for
seniors as well as the income tax credit for individuals with a disability may claim only one of
these.
Table 2
Colorado Income Tax Credit for Individuals with a Disability Under HB 24-1268
Tax Year 2025
Single Filers Joint Filers
Federal AGI* Amount of Credit Federal AGI* Amount of Credit
Up to $10,000 $1,200 Up to $16,000 $1,200
$10,001 to $12,500 $1,000 $16,001 to $20,000 $1,000
$12,501 to $15,000 $800 $20,001 to $24,000 $800
$15,001 to $17,500 $600 $24,001 to $28,000 $600
$17,501 to $20,000 $400 $28,001 to $32,000 $400
The bill combines the property tax and rent assistance rebate grants and the heat and fuel
expenses grants into one statutory section and updates dollar values used to calculate the PTC
rebates to their current (2023) values.
Background
The PTC rebate is designed to provide cash benefits to low-income seniors, surviving spouses, or
people with a disability. The cash benefit is a rebate of property tax, rent, and heat paid during
the previous year. For calendar year 2023, the maximum rebate amount for both grants is
$1,112. In order to qualify for the rebate, individuals and spouses must have an annual income
from all sources less than or equal to $18,026 and $24,345, respectively. Rebates begin to
decline from the maximum rebate as income for individuals and spouses rises above $9,692 and
$15,668, respectively. Rebates decline by 10 percent of a claimant’s income above this threshold,
to the minimum rebate amount of $374. The income limits and credit amounts are adjusted for
inflation each year. The Department of Revenue (DOR) administers the PTC rebate program
while the Department of Human Services provides outreach activities. According to Department
of Revenue preliminary data, for calendar year 2022, about 16,000 rebate applications were
approved, with about 6,000 applications from persons with a disability and 10,000 from seniors
or surviving spouses, with a total estimated cost of $8.2 million. Rebates may be claimed for up
to two calendar years after expenses are incurred. Page 3
August 2, 2024 HB 24-1268
Assumptions
The fiscal note assumes inflation and economic activity consistent with the December 2023
LCS forecast, as well as changes in the PTC claimant population and expenditures consistent
with recent historical trends. Utilization rates for the new income tax credit are assumed to be
consistent with those of similar tax credits. Due to lack of data regarding the population of
people with a disability in Colorado, the fiscal note assumes a distribution of income that is
similar to that of the senior population. Based on these assumptions as well as data from the
American Community Survey and the U.S. Social Security Administration on residents with a
disability and workers receiving Social Security disability payments in Colorado, the fiscal note
assumes that approximately 12,500 people will claim the new tax credit, while 6,000 fewer
people will claim the PTC grant in tax year 2025.
State Revenue
The bill is assumed to reduce General Fund revenue by $3.2 million in FY 2024-25 (a half-year
impact), $6.5 million in FY 2025-26, $6.7 million in FY 2026-27, and increasing amounts in future
years as credit amounts and utilization rates rise. These amounts reflect the assumptions stated
above; however, the bill’s actual impact may be higher or lower depending on the rate at which
the credit is utilized. The bill decreases revenue from income taxes, which are subject to TABOR.
State Expenditures
The bill decreases General Fund expenditures in the Department of Revenue (DOR) by
$1.4 million in FY 2024-25, $2.6 million in FY 2025-26, $2.5 million in FY 2026-27 and similar
amounts in future years. These amounts reflect the net impact of reducing PTC rebates and
costs for DOR to manage the new tax credit, as shown in Table 3 and detailed below.
Table 3
Expenditures Under HB 24-1268
FY 2024-25 FY 2025-26 FY 2026-27
Department of Revenue
PTC Rebates ($1,400,123) ($2,720,154) ($2,542,505)
Personal Services - $88,933 $59,461
Operating Expenses - $2,048 $1,408
Capital Outlay Costs - $13,340 -
Computer Programming and Testing - $32,865 -
Research and Analysis - $7,392 $7,328
Document Management - $13,825 $1,928
Centrally Appropriated Costs
1
- $26,738 $18,225
Total Cost ($1,400,123) ($2,535,013) ($2,454,155)
Total FTE - 1.6 FTE 1.1 FTE
1
Centrally appropriated costs are not included in the bill's appropriation. Page 4
August 2, 2024 HB 24-1268
PTC Rebates. The bill reduces expenditures for PTC rebates for persons with a disability. These
expenditure reductions are estimated at $1.4 million in FY 2024-25 (a half-year impact),
$2.7 million in FY 2025-26, $2.5 million in FY 2026-27, and declining amounts in future years,
reflecting an expected decline in the number of persons with a disability among PTC recipients.
Staff. The DOR will require an additional 1.6 FTE for tax examiners starting in FY 2025-26,
prorated for a November 2025 start date, and 1.1 FTE in FY 2026-27 and ongoing. Standard
operating and capital outlay costs are included, and account for the bill’s effective date. Tax
examiner workload is required to process and review additional returns claiming the new tax
credit and to resolve errors in returns, and is net of the anticipated decline in the workload
required for processing PTC applications.
Computer programming and testing. For FY 2025-26 only, the DOR will have one-time costs
of $32,865 for computer programming and testing. Programming costs are estimated at $23,175
representing 100 hours of contract programming at a rate of $231.75 per hour. Costs for testing
to ensure that programming changes are functioning properly are estimated at $9,690,
representing 190 hours for the Innovation, Strategy, and Delivery section in the Executive
Director’s Office at $35 per hour, and 95 hours of user acceptance testing at a rate of $32 per
hour.
Research and analysis. Beginning in FY 2025-26, the Office of Research and Analysis within
DOR will expend $7,392 each year to collect and report data on the new tax credit.
Tax form changes. For FY 2025-26 and FY 2026-27, the bill requires $13,825 and $1,928,
respectively, in expenditures to implement tax form changes and manage paper returns. These
expenditures will take place in the Department of Personnel and Administration using
reappropriated funds from the DOR.
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 3.
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 December 2023 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.
Page 5
August 2, 2024 HB 24-1268
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. Based on this fiscal note,
the bill is expected to increase the amount of General Fund held in reserve by the amounts
shown in Table 1, decreasing the amount of General Fund available for other purposes. PTC
rebates are not subject to appropriation, so the decrease in PTC rebates under the bill has no
impact on the reserve requirement.
Technical Note
Maintenance of effort requirement. The U.S. Social Security Administration enforces a
maintenance of effort (MOE) requirement for the Supplemental Security Income (SSI) Program,
which requires that the state spend a certain amount of non-federal funds on benefits to
qualifying Coloradans in any given year. Those payments typically come from Old Age Pension
(OAP), Aid to the Needy Disabled (AND), Home Care Allowance (HCA) benefits, and PTC
Rebates. If state appropriations for these programs do not otherwise satisfy the federal MOE
requirement, the bill will require increased expenditures to offset any decline in the utilization of
the PTC rebate to meet the MOE. The tax expenditures on the new tax credit created by this bill
do not count toward the MOE requirement.
Tax expenditure evaluation. The Office of the State Auditor (OSA) is required to conduct
recurring evaluations of each state tax expenditure according to metrics established when the
tax expenditure is created or extended. The bill includes metrics to evaluate the performance of
the tax expenditure; however, data may not be available in the future to evaluate the
performance of this expenditure using these metrics. If data are unavailable, the OSA will
evaluate the performance of the tax expenditure based on data available at the time.
Effective Date
The bill was signed into law by the Governor on June 6, 2024, and takes effect on
August 7, 2024, assuming no referendum petition is filed.
State and Local Government Contacts
Human Services 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.