Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
REVISED
This Version Includes All Amendments Adopted
on Second Reading in the Second House
LLS NO. 24-0501.05 Jessica Herrera x4218
HOUSE BILL 24-1340
House Committees Senate Committees
Education Finance
Finance Appropriations
Appropriations
A BILL FOR AN ACT
C
ONCERNING THE CREATION OF I NCENTIVES AGAINST THE STATE101
INCOME TAX FOR STUDENTS PURSUING POST -SECONDARY102
CREDENTIALS, AND, IN CONNECTION THEREWITH, MAKING AN103
APPROPRIATION.104
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
.)
The bill creates 2 separate state income tax incentives (incentives)
to encourage enrollment in institutions of higher education. For income
tax years commencing on or after January 1, 2024, but prior to January 1,
SENATE
Amended 2nd Reading
May 7, 2024
HOUSE
3rd Reading Unamended
May 4, 2024
HOUSE
Amended 2nd Reading
May 3, 2024
HOUSE SPONSORSHIP
Bird and Taggart, Amabile, Boesenecker, Catlin, deGruy Kennedy, English, Froelich,
Hamrick, Hernandez, Herod, Jodeh, Joseph, Lieder, Lukens, Mabrey, Mauro, McCluskie,
McLachlan, Ortiz, Ricks, Rutinel, Sirota, Snyder, Soper, Titone, Valdez, Velasco, Weissman,
Young
SENATE SPONSORSHIP
Kirkmeyer and Zenzinger,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. 2030, the first incentive is available to a graduate of any Colorado
institution of higher education with a credential required or supported by
certain jobs identified by the 2023 Colorado talent pipeline report,
defined by the bill as "top jobs", in the amount of $250 for the completion
of a qualified program less than one year in duration, $500 for the
completion of a qualified program between one year and 2 years in
duration, $1,500 for graduates of an associate's degree program, and
$3,000 for graduates of a bachelor's degree program.
For income tax years commencing on or after January 1, 2026, but
prior to January 1, 2030, the second incentive is available to an eligible
transfer student attending a 4-year Colorado institution of higher
education, in the amount of $50 per credit hour transferred from either a
2-year Colorado institution of higher education or earned while under
certain enrollment status in high school. The incentive is capped at 60
credit hours or $3,000 and may only be awarded after the student
completes at least 15 credits at the 4-year Colorado institution of higher
education.
Notwithstanding the incentive amounts otherwise allowed for both
incentives, if the revenue forecast prepared by either legislative council
staff or the office of state planning and budgeting in June of any income
tax year for which an incentive is allowed projects that the amount of
excess state revenues for the state fiscal year that ends during the income
tax year will be:
! At least $500 million but no more than $750 million, the
amount of the incentive allowed is reduced by fifty percent
for that income tax year.
! Less than $500 million, the incentive is not allowed for that
income tax year.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 39-22-560 as2
follows:3
39-22-560. Tuition and fee tax credit for qualifying students4
- tax preference performance statement - legislative declaration -5
definitions - repeal. (1) (a) THE GENERAL ASSEMBLY FINDS,6
DETERMINES, AND DECLARES THAT:7
(I) THE COST OF HIGHER EDUCATION AND STUDENT DEBT CAN BE8
A DETERRENT FOR MANY STUDENTS TO PURSUE POST-SECONDARY9
1340-2- CREDENTIALS;1
(II) C
OLORADO'S POSTSECONDARY MATRICULATION RATE WAS
2
LESS THAN FIFTY PERCENT IN 2021 WITH A LARGE SHARE GOING OUT OF3
STATE. POSTSECONDARY EDUCATION HELPS STUDENTS ACHIEVE4
ECONOMIC MOBILITY, AND STUDENTS ARE MORE LIKELY TO STAY IN5
C
OLORADO IF THEY ATTEND INSTITUTIONS IN COLORADO. BY
6
INCENTIVIZING STUDENTS TO ATTEND INSTITUTIONS IN COLORADO,7
STUDENTS WILL SEE MORE ECONOMIC MOBILITY WHILE BENEFITING THE8
STATE WORKFORCE.9
(III) I
T IS THE INTENT OF THE GENERAL ASSEMBLY THAT IN THE
10
EVENT OF A RECESSION, EXISTING SUPPORT OF NEED-BASED FINANCIAL AID11
BE A POTENTIAL BACKSTOP FOR THIS INCENTIVE ;12
(IV) THE COSTS OF HIGHER EDUCATION ARE A BARRIER TO MANY13
STUDENTS. REDUCING THOSE COSTS AND STUDENT DEBT CAN HELP14
STUDENTS NOT ONLY ATTEND COLLEGE BUT ALSO BE FINANCIALLY15
SUCCESSFUL. TARGETED INCENTIVES FOR ATTENDING PUBLIC16
INSTITUTIONS OF HIGHER EDUCATION, WHICH HAVE LOWER TUITION, HELP17
MORE STUDENTS COMPLETE HIGHER EDUCATION WITH LESS OR NO DEBT18
AND HELP COLORADO RETAIN OUR OWN TALENT .19
(V) B
UILDING BRIDGES TO HIGHER EDUCATION SUPPORTS OUR
20
STATE'S STUDENTS AND ECONOMIC HEALTH .21
(VI) TO CONTINUE TO STRENGTHEN THE EDUCATIONAL PIPELINE,22
A FINANCIAL INCENTIVE SHOULD BE PROVIDED TO LOW - AND MIDDLE-23
INCOME POST-SECONDARY COLORADO STUDENTS.24
(b) IN ACCORDANCE WITH SECTION 39-21-304 (1), WHICH25
REQUIRES EACH BILL THAT CREATES A NEW TAX EXPENDITURE TO INCLUDE26
A TAX PREFERENCE PERFORMANCE STATEMENT AS PART OF A STATUTORY27
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-3- LEGISLATIVE DECLARATION, THE GENERAL ASSEMBLY FINDS AND1
DECLARES THAT THE GENERAL LEGISLATIVE PURPOSES OF THIS TAX2
EXPENDITURE ARE TO INDUCE CERTAIN DESIGNATED BEHAVIOR BY3
TAXPAYERS AND PROVIDE TAX RELIEF FOR CERTAIN INDIVIDUALS.4
SPECIFICALLY, THIS TAX EXPENDITURE IS INTENDED TO ENCOURAGE5
STUDENTS TO ATTEND PUBLIC COLORADO INSTITUTIONS OF HIGHER6
EDUCATION AND REDUCE STUDENT DEBT BY PROVIDING A YEARLY7
REFUNDABLE INCENTIVE TO STUDENTS IN THEIR FIRST TWO YEARS OF8
HIGHER EDUCATION AGAINST THE TUITION AND FEES PAID TO A COLORADO9
PUBLIC INSTITUTION OF HIGHER EDUCATION .10
(c) T
HE TAX INCENTIVE PROVIDES A YEARLY REFUNDABLE CREDIT
11
TO STUDENTS AGAINST THE TUITION AND FEE COSTS PAID TO A PUBLIC12
TWO-YEAR OR FOUR-YEAR INSTITUTION, AREA TECHNICAL COLLEGE, OR13
LOCAL DISTRICT COLLEGE IN THEIR FIRST TWO YEARS OF HIGHER14
EDUCATION. ELIGIBLE STUDENTS ARE THOSE WHO ARE CLASSIFIED AS15
IN-STATE STUDENTS, ENROLL IN AT LEAST SIX CREDIT HOURS IN A16
SEMESTER OR TERM, HAVE AT LEAST A 2.5 GRADE POINT AVERAGE IN A17
SEMESTER OR TERM, MATRICULATED IN COLLEGE WITHIN TWO YEARS OF18
HIGH SCHOOL GRADUATION , AND HAVE A FEDERAL ADJUSTED GROSS19
HOUSEHOLD INCOME OF NINETY THOUSAND DOLLARS OR LESS AS20
INDICATED ON THE FREE APPLICATION FOR FEDERAL STUDENT AID OR21
C
OLORADO APPLICATION FOR STATE FINANCIAL AID .
22
(d) T
HE 2022 AMERICAN COMMUNITY SURVEY CONDUCTED BY THE
23
U
NITED STATES CENSUS BUREAU FOUND THAT THE MEDIAN HOUSEHOLD
24
INCOME IN COLORADO IS EIGHTY NINE THOUSAND THREE HUNDRED TWO25
DOLLARS. A NINETY THOUSAND DOLLAR INCOME THRESHOLD ENSURES26
THAT ALL COLORADO HOUSEHOLDS AT OR BELOW MEDIAN INCOME WILL27
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-4- BE ABLE TO BENEFIT FROM THIS INCENTIVE.1
(e) THE GENERAL ASSEMBLY AND THE STATE AUDITOR SHALL2
MEASURE THE EFFECTIVENESS OF THE INCENTIVE IN ACHIEVING THE3
PURPOSE SPECIFIED IN SUBSECTION (1)(b) OF THIS SECTION BASED ON THE4
NUMBER OF INCENTIVES THAT ARE CLAIMED .5
(2) AS USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE6
REQUIRES:7
(a) "A
CADEMIC YEAR" MEANS THE PERIOD BEGINNING WITH A
8
C
OLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION 'S FALL SEMESTER
9
OR TERM AND ENDING THE FOLLOWING CALENDAR YEAR AT THE10
CONCLUSION OF THE COLORADO PUBLIC INSTITUTION OF HIGHER11
EDUCATION'S SUMMER SEMESTER OR TERM .12
(b) "COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION "13
MEANS:14
(I) A PUBLIC, POST-SECONDARY INSTITUTION THAT IS GOVERNED15
BY THE BOARD OF GOVERNORS OF THE COLORADO STATE UNIVERSITY16
SYSTEM, THE BOARD OF REGENTS OF THE UNIVERSITY OF COLORADO, THE17
BOARD OF TRUSTEES OF THE COLORADO SCHOOL OF MINES, THE BOARD OF18
TRUSTEES OF THE UNIVERSITY OF NORTHERN COLORADO, THE BOARD OF19
TRUSTEES OF ADAMS STATE UNIVERSITY, THE BOARD OF TRUSTEES OF20
WESTERN COLORADO UNIVERSITY, THE BOARD OF TRUSTEES OF21
COLORADO MESA UNIVERSITY, THE BOARD OF TRUSTEES OF FORT LEWIS22
COLLEGE, THE BOARD OF TRUSTEES OF METROPOLITAN STATE UNIVERSITY23
OF DENVER, OR THE STATE BOARD FOR COMMUNITY COLLEGES AND24
OCCUPATIONAL EDUCATION ; 25
(II) AN AREA TECHNICAL COLLEGE , AS DEFINED IN SECTION26
23-60-103 (1); OR27
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-5- (III) COLORADO MOUNTAIN COLLEGE AND AIMS COMMUNITY1
COLLEGE.2
(c) "ELIGIBLE STUDENT" MEANS AN INDIVIDUAL WHO:3
(I) HAS MATRICULATED AT A COLORADO PUBLIC INSTITUTION OF4
HIGHER EDUCATION WITHIN TWO YEARS OF COMPLETION OF HIGH SCHOOL5
GRADUATION OR AN EQUIVALENT .6
(II) IS DESIGNATED AS A DEGREE OR CREDENTIAL SEEKING7
STUDENT AT A COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION FOR8
THE SEMESTER OR TERM FOR WHICH AN INCENTIVE IS CLAIMED ;9
(III) QUALIFIES FOR IN-STATE TUITION, AS DESCRIBED IN ARTICLE10
7 OF TITLE 23, FOR THE SEMESTER OR TERM FOR WHICH THE INCENTIVE IS11
CLAIMED; AND12
(IV) HAS COMPLETED A FREE APPLICATION FOR FEDERAL STUDENT13
AID (FAFSA) OR COLORADO APPLICATION FOR STATE FINANCIAL AID14
(CASFA) FOR THE SEMESTER OR TERM FOR WHICH AN INCENTIVE IS15
CLAIMED THAT INDICATES THAT THE STUDENT'S HOUSEHOLD HAS AN16
ADJUSTED GROSS INCOME THAT IS NINETY THOUSAND DOLLARS OR LESS . 17
18
(d) "INCENTIVE" MEANS THE REFUNDABLE CREDIT ALLOWED BY19
THIS SECTION.20
(e) "Q
UALIFYING SEMESTER OR TERM " MEANS A SEMESTER OR
21
TERM THAT THE ELIGIBLE STUDENT:22
(I)
BEGINS WITH FEWER THAN SIXTY -SIX CREDIT HOURS
23
ACCUMULATED, INCLUDING ALL CREDITS TRANSFERRED TO THE24
C
OLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION , EXCEPT THOSE
25
CREDITS EARNED THROUGH PRIOR LEARNING ASSESSMENT , CONCURRENT26
ENROLLMENT, ADVANCE PLACEMENT , THE INTERNATIONAL27
1340
-6- BACCALAUREATE PROGRAM , MILITARY CREDITS, OR ANY OTHER CREDITS1
ACCUMULATED PRIOR TO MATRICULATION AT ANY INSTITUTION OF HIGHER2
EDUCATION; AND3
(II)
COMPLETES EARNING AT LEAST SIX CREDIT HOURS OR
4
EQUIVALENT WITH A GRADE POINT AVERAGE OF 2.5 OR HIGHER.5
(f) "SCHOLARSHIPS OR GRANTS" MEANS THE SUM OF ANY AMOUNT6
PAID FOR THE BENEFIT OF AN ELIGIBLE STUDENT THAT ARE REQUIRED TO7
BE TAKEN INTO ACCOUNT PURSUANT TO SECTION 25A (g)(2) OF THE8
INTERNAL REVENUE CODE.9
(g) "TUITION AND FEES" HAS THE SAME MEANING AS "QUALIFIED10
TUITION AND RELATED EXPENSES" AS DEFINED IN SECTION 25A (f)(1) OF11
THE INTERNAL REVENUE CODE THAT ARE PAID BY OR FOR THE BENEFIT OF12
AN ELIGIBLE STUDENT.13
(3) (a) FOR EACH INCOME TAX YEAR COMMENCING ON OR AFTER14
JANUARY 1, 2025, BUT PRIOR TO JANUARY 1, 2033, AN ELIGIBLE15
STUDENT IS ALLOWED AN INCENTIVE AGAINST THE INCOME TAXES IMPOSED16
BY THIS ARTICLE 22 FOR EVERY QUALIFYING SEMESTER OR TERM17
COMPLETED DURING THE ACADEMIC YEAR ENDING DURING THE INCOME18
TAX YEAR.19
(b) T
HE AMOUNT OF INCENTIVE ALLOWED TO AN ELIGIBLE
20
STUDENT FOR EACH INCOME TAX YEAR IS EQUAL TO THE AMOUNT PAID BY21
OR FOR THE BENEFIT OF THE ELIGIBLE STUDENT IN TUITION AND FEES TO A22
C
OLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION MINUS ANY
23
SCHOLARSHIPS OR GRANTS FOR EACH QUALIFYING SEMESTER OR TERM24
DURING THE ACADEMIC YEAR COMPLETED DURING THE PRIOR CALENDAR25
YEAR.26
(4) (a) EACH COLORADO PUBLIC INSTITUTION OF HIGHER27
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-7- EDUCATION IS REQUIRED BY JANUARY 15, 2026, AND EVERY JANUARY 151
THEREAFTER UNTIL 2034, TO ELECTRONICALLY REPORT EACH ELIGIBLE2
STUDENT FOR ANY QUALIFYING SEMESTER OR TERM COMPLETED DURING3
THE ACADEMIC YEAR COMPLETED DURING THE PRIOR CALENDAR YEAR TO4
THE DEPARTMENT OF HIGHER EDUCATION IN A FORMAT PRESCRIBED BY5
THE DEPARTMENT OF HIGHER EDUCATION THAT INCLUDES:6
(I) THE STUDENT'S TAX IDENTIFICATION NUMBER OR SOCIAL7
SECURITY NUMBER; AND8
(II) THE AMOUNT OF TUITION AND FEES PAID MINUS ANY9
SCHOLARSHIPS OR GRANTS.10
(b) BY JANUARY 31, 2026, AND EVERY JANUARY 31 THEREAFTER11
THROUGH 2034, THE COLORADO PUBLIC INSTITUTION OF HIGHER12
EDUCATION SHALL PROVIDE EACH ELIGIBLE STUDENT WITH A STATEMENT13
CONTAINING THE INFORMATION PERTAINING TO THAT STUDENT 'S14
ELIGIBILITY AND INCENTIVE AMOUNT REPORTED TO THE DEPARTMENT OF15
HIGHER EDUCATION PURSUANT TO SUBSECTION (5)(a) OF THIS SECTION.16
(c) T
HE DEPARTMENT OF HIGHER EDUCATION IS REQUIRED BY
17
J
ANUARY 31, 2026, AND EVERY JANUARY 31 THEREAFTER THROUGH 2034,
18
TO ELECTRONICALLY REPORT THE INFORMATION RECEIVED PURSUANT TO19
SUBSECTION (4)(a) OF THIS SECTION ALONG WITH ANY LATER20
CORRECTIONS OR ADDITIONS TO THE DEPARTMENT OF REVENUE IN A21
FORMAT PRESCRIBED BY THE EXECUTIVE DIRECTOR .22
(5) THE AMOUNT OF THE INCENTIVE ALLOWED UNDER THIS23
SECTION THAT EXCEEDS THE AN ELIGIBLE STUDENT'S INCOME TAXES DUE24
IS REFUNDED TO THE TAXPAYER.25
(6) (a) THE DEPARTMENT OF HIGHER EDUCATION , IN CONSULTATION26
WITH COLORADO PUBLIC INSTITUTIONS OF HIGHER EDUCATION, SHALL27
1340
-8- DETERMINE EACH INSTITUTION'S AVERAGE PERCENTAGE OF STATE AND1
INSTITUTIONAL FINANCIAL AID ALLOCATED TO THE RESIDENT STUDENT2
POPULATION WHO HAVE A FAMILY INCOME OF NINETY THOUSAND DOLLARS3
OR LESS IN EACH YEAR OF THE THREE YEARS PRIOR TO 2025.4
(b) E
ACH COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION
5
SHALL MAINTAIN A PERCENTAGE OF STATE AND INSTITUTIONAL FI NANCIAL6
AID TO RESIDENT STUDENTS WHO HAVE AN ADJUSTED GROSS HOUSEHOLD7
INCOME OF NINETY THOUSAND DOLLARS OR LESS THAT IS EQUAL TO OR8
GREATER THAN THE AVERAGE PERCENTAGE OF STUDENT AND9
INSTITUTIONAL FINANCIAL AID CALCULATED BY THE DEPARTMENT OF10
HIGHER EDUCATION IN EACH OF THE THREE ACADEMIC YEARS PRIOR TO11
THE ACADEMIC YEAR 2024-25.12
(c) I
F AN INSTITUTION DOES NOT MAINTAIN THE PERCENTAGE , THE
13
INSTITUTION SHALL NOTIFY THE DEPARTMENT OF HIGHER EDUCATION BY14
A DATE DETERMINED BY THE DEPARTMENT OF HIGHER EDUCATION AND15
MUST INCLUDE IN THE NOTIFICATION A DESCRIPTION OF CHANGES TO16
INSTITUTIONAL FINANCES OR THE STUDENT POPULATION THAT PREVENTED17
THE INSTITUTION FROM MAINTAINING THE STATE AND INSTITUTIONAL18
FINANCIAL AID ALLOCATION PERCENTAGE . THE DEPARTMENT OF HIGHER19
EDUCATION SHALL INCLUDE THIS INFORMATION IN ITS REPORT DESCRIBED20
IN SUBSECTION (7)(d) OF THIS SECTION.21
(d) ON OR BEFORE JUNE 30, 2027, AND EACH YEAR THEREAFTER22
UNTIL 2037, THE DEPARTMENT OF HIGHER EDUCATION SHALL SUBMIT A23
REPORT TO THE JOINT BUDGET COMMITTEE AND THE HOUSE OF24
REPRESENTATIVES AND SENATE EDUCATION COMMITTEES, OR ANY25
SUCCESSOR COMMITTEES , INCLUDING, FOR EACH INSTITUTION, THE26
AVERAGE PERCENTAGE OF STATE AND INSTITUTIONAL FINANCIAL AID27
1340
-9- ALLOCATED TO THE RESIDENT STUDENT POPULATION WHO HAVE A FAMILY1
INCOME OF NINETY THOUSAND DOLLARS OR LESS IN THE THREE ACADEMIC2
YEARS PRIOR TO THE ACADEMIC YEAR 2024-25, AND IN EACH ACADEMIC3
YEAR THEREAFTER UNTIL 2034. THE DEPARTMENT OF HIGHER EDUCATION4
SHALL INCLUDE IN THE REPORT STUDENT ENROLLMENT INFORMATION FOR5
ELIGIBLE AND NON-ELIGIBLE STUDENTS, DISAGGREGATED BY INCOME, AND6
SHALL INCLUDE, ONCE THE DATE IS AVAILABLE , DISAGGREGATED7
OUTCOME MEASURES BY INCOME FOR ELIGIBLE AND NON-ELIGIBLE8
STUDENTS, INCLUDING BUT NOT LIMITED TO STUDENT RETENTION AND9
COMPLETION RATES. EACH COLORADO PUBLIC INSTITUTION OF HIGHER10
EDUCATION SHALL ANNUALLY REPORT STUDENT LEVEL FINANCIAL AID,11
STUDENT ELIGIBILITY, AND INCENTIVE ELIGIBILITY INFORMATION TO THE12
DEPARTMENT OF HIGHER EDUCATION THAT THE DEPARTMENT OF HIGHER13
EDUCATION DEEMS NECESSARY TO PROVIDE TO THE DEPARTMENT OF14
REVENUE FOR INCENTIVE ADMINISTRATION OR FOR INCLUSION IN THE15
REPORT.16
(7) THIS SECTION IS REPEALED, EFFECTIVE DECEMBER 31, 2037.17
SECTION 2. Appropriation. (1) For the 2024-25 state fiscal 18
year, $101,756 is appropriated to the department of higher education for19
use by the Colorado commission on higher education and higher20
education special purpose programs. This appropriation is from the21
general fund and is based on the assumption that the commission will22
require an additional 1.3 FTE. To implement this act, the commission23
may use this appropriation for administration.24
SECTION 3. Act subject to petition - effective date. This act25
takes effect at 12:01 a.m. on the day following the expiration of the26
ninety-day period after final adjournment of the general assembly; except27
1340
-10- that, if a referendum petition is filed pursuant to section 1 (3) of article V1
of the state constitution against this act or an item, section, or part of this2
act within such period, then the act, item, section, or part will not take3
effect unless approved by the people at the general election to be held in4
November 2024 and, in such case, will take effect on the date of the5
official declaration of the vote thereon by the governor.6
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-11-