HOUSE BILL 24-1340
BY REPRESENTATIVE(S) Bird and Taggart, Amabile, Boesenecker,
Catlin, deGruy Kennedy, English, Froelich, Hamrick, Hernandez, Herod,
Jodeh, Joseph, Lieder, Lukens, Mabrey, Mauro, McLachlan, Ortiz, Ricks,
Rutinel, Sirota, Snyder, Soper, Titone, Valdez, Velasco, Weissman, Young,
McCluskie, Brown, Clifford, Garcia, Kipp, Lindsay, Marvin, Story;
also SENATOR(S) Kirkmeyer and Zenzinger, Bridges, Cutter, Exum,
Fields, Gardner, Gonzales, Hansen, Jaquez Lewis, Michaelson Jenet, Priola,
Rodriguez, Winter F., Fenberg.
C
ONCERNING THE CREATION OF INCENTIVES AGAINST THE STATE INCOME
TAX FOR STUDENTS PURSUING POST
-SECONDARY CREDENTIALS, AND,
IN CONNECTION THEREWITH, MAKING AN APPROPRIATION.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, add 39-22-570 as
follows:
39-22-570. Tuition and fee tax credit for qualifying students -
tax preference performance statement - legislative declaration -
definitions - repeal. (1) (a) T
HE GENERAL ASSEMBLY FINDS, DETERMINES,
AND DECLARES THAT:
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. (I) THE COST OF HIGHER EDUCATION AND STUDENT DEBT CAN BE A
DETERRENT FOR MANY STUDENTS TO PURSUE POST
-SECONDARY
CREDENTIALS
;
(II) C
OLORADO'S POSTSECONDARY MATRICULATION RATE WAS LESS
THAN FIFTY PERCENT IN
2021 WITH A LARGE SHARE GOING OUT OF STATE .
P
OSTSECONDARY EDUCATION HELPS STUDENTS ACHIEVE ECONOMIC
MOBILITY
, AND STUDENTS ARE MORE LIKELY TO STAY IN COLORADO IF THEY
ATTEND INSTITUTIONS IN
COLORADO. BY INCENTIVIZING STUDENTS TO
ATTEND INSTITUTIONS IN
COLORADO, STUDENTS WILL SEE MORE ECONOMIC
MOBILITY WHILE BENEFITING THE STATE WORKFORCE
.
(III) I
T IS THE INTENT OF THE GENERAL ASSEMBLY THAT IN THE
EVENT OF A RECESSION
, EXISTING SUPPORT OF NEED-BASED FINANCIAL AID
BE A POTENTIAL BACKSTOP FOR THIS INCENTIVE
;
(IV) T
HE COSTS OF HIGHER EDUCATION ARE A BARRIER TO MANY
STUDENTS
. REDUCING THOSE COSTS AND STUDENT DEBT CAN HELP
STUDENTS NOT ONLY ATTEND COLLEGE BUT ALSO BE FINANCIALLY
SUCCESSFUL
. TARGETED INCENTIVES FOR ATTENDING PUBLIC INSTITUTIONS
OF HIGHER EDUCATION
, WHICH HAVE LOWER TUITION, HELP MORE STUDENTS
COMPLETE HIGHER EDUCATION WITH LESS OR NO DEBT AND HELP
COLORADO
RETAIN OUR OWN TALENT
.
(V) B
UILDING BRIDGES TO HIGHER EDUCATION SUPPORTS OUR
STATE
'S STUDENTS AND ECONOMIC HEALTH .
(VI) T
O CONTINUE TO STRENGTHEN THE EDUCATIONAL PIPELINE , A
FINANCIAL INCENTIVE SHOULD BE PROVIDED TO LOW
- AND MIDDLE- INCOME
POST
-SECONDARY COLORADO STUDENTS.
(b) I
N ACCORDANCE WITH SECTION 39-21-304 (1), WHICH REQUIRES
EACH BILL THAT CREATES A NEW TAX EXPENDITURE TO INCLUDE A TAX
PREFERENCE PERFORMANCE STATEMENT AS PART OF A STATUTORY
LEGISLATIVE DECLARATION
, THE GENERAL ASSEMBLY FINDS AND DECLARES
THAT THE GENERAL LEGISLATIVE PURPOSES OF THIS TAX EXPENDITURE ARE
TO INDUCE CERTAIN DESIGNATED BEHAVIOR BY TAXPAYERS AND PROVIDE
TAX RELIEF FOR CERTAIN INDIVIDUALS
. SPECIFICALLY, THIS TAX
EXPENDITURE IS INTENDED TO ENCOURAGE STUDENTS TO ATTEND PUBLIC
PAGE 2-HOUSE BILL 24-1340 COLORADO INSTITUTIONS OF HIGHER EDUCATION AND REDUCE STUDENT
DEBT BY PROVIDING A YEARLY REFUNDABLE INCENTIVE TO STUDENTS IN
THEIR FIRST TWO YEARS OF HIGHER EDUCATION AGAINST THE TUITION AND
FEES PAID TO A
COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION .
(c) T
HE TAX INCENTIVE PROVIDES A YEARLY REFUNDABLE CREDIT TO
STUDENTS AGAINST THE TUITION AND FEE COSTS PAID TO A PUBLIC
TWO
-YEAR OR FOUR-YEAR INSTITUTION, AREA TECHNICAL COLLEGE , OR
LOCAL DISTRICT COLLEGE IN THEIR FIRST TWO YEARS OF HIGHER EDUCATION
.
E
LIGIBLE STUDENTS ARE THOSE WHO ARE CLASSIFIED AS IN -STATE
STUDENTS
, ENROLL IN AT LEAST SIX CREDIT HOURS IN A SEMESTER OR TERM,
HAVE AT LEAST A 2.5 GRADE POINT AVERAGE IN A SEMESTER OR TERM ,
MATRICULATED IN COLLEGE WITHIN TWO YEARS OF HIGH SCHOOL
GRADUATION
, AND HAVE A FEDERAL ADJUSTED GROSS HOUSEHOLD INCOME
OF NINETY THOUSAND DOLLARS OR LESS AS INDICATED ON THE FREE
APPLICATION FOR FEDERAL STUDENT AID OR
COLORADO APPLICATION FOR
STATE FINANCIAL AID
.
(d) T
HE 2022 AMERICAN COMMUNITY SURVEY CONDUCTED BY THE
UNITED STATES CENSUS BUREAU FOUND THAT THE MEDIAN HOUSEHOLD
INCOME IN
COLORADO IS EIGHTY NINE THOUSAND THREE HUNDRED TWO
DOLLARS
. A NINETY THOUSAND DOLLAR INCOME THRESHOLD ENSURES THAT
ALL
COLORADO HOUSEHOLDS AT OR BELOW MEDIAN INCOME WILL BE ABLE
TO BENEFIT FROM THIS INCENTIVE
.
(e) T
HE GENERAL ASSEMBLY AND THE STATE AUDITOR SHALL
MEASURE THE EFFECTIVENESS OF THE INCENTIVE IN ACHIEVING THE PURPOSE
SPECIFIED IN SUBSECTION
(1)(b) OF THIS SECTION BASED ON THE NUMBER OF
INCENTIVES THAT ARE CLAIMED
.
(2) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE
REQUIRES
:
(a) "A
CADEMIC YEAR" MEANS THE PERIOD BEGINNING WITH A
COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION 'S FALL SEMESTER OR
TERM AND ENDING THE FOLLOWING CALENDAR YEAR AT THE CONCLUSION
OF THE
COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION 'S SUMMER
SEMESTER OR TERM
.
(b) "C
OLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION " MEANS:
PAGE 3-HOUSE BILL 24-1340 (I) A PUBLIC, POST-SECONDARY INSTITUTION THAT IS GOVERNED BY
THE BOARD OF GOVERNORS OF THE
COLORADO STATE UNIVERSITY SYSTEM ,
THE BOARD OF REGENTS OF THE UNIVERSITY OF COLORADO, THE BOARD OF
TRUSTEES OF THE
COLORADO SCHOOL OF MINES , THE BOARD OF TRUSTEES
OF THE UNIVERSITY OF NORTHERN
COLORADO, THE BOARD OF TRUSTEES OF
ADAMS STATE UNIVERSITY , THE BOARD OF TRUSTEES OF WESTERN
COLORADO UNIVERSITY, THE BOARD OF TRUSTEES OF COLORADO MESA
UNIVERSITY
, THE BOARD OF TRUSTEES OF FORT LEWIS COLLEGE, THE BOARD
OF TRUSTEES OF METROPOLITAN STATE UNIVERSITY OF
DENVER, OR THE
STATE BOARD FOR COMMUNITY COLLEGES AND OCCUPATIONAL EDUCATION
;
(II) A
N AREA TECHNICAL COLLEGE , AS DEFINED IN SECTION
23-60-103 (1); OR
(III) COLORADO MOUNTAIN COLLEGE AND AIMS COMMUNITY
COLLEGE
.
(c) "E
LIGIBLE STUDENT" MEANS AN INDIVIDUAL WHO:
(I) H
AS MATRICULATED AT A COLORADO PUBLIC INSTITUTION OF
HIGHER EDUCATION WITHIN TWO YEARS OF COMPLETION OF HIGH SCHOOL
GRADUATION OR AN EQUIVALENT
.
(II) I
S DESIGNATED AS A DEGREE OR CREDENTIAL SEEKING STUDENT
AT A
COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION FOR THE
SEMESTER OR TERM FOR WHICH AN INCENTIVE IS CLAIMED
;
(III) Q
UALIFIES FOR IN-STATE TUITION, AS DESCRIBED IN ARTICLE 7
OF TITLE 23, FOR THE SEMESTER OR TERM FOR WHICH THE INCENTIVE IS
CLAIMED
; AND
(IV) HAS COMPLETED A FREE APPLICATION FOR FEDERAL STUDENT
AID
(FAFSA) OR COLORADO APPLICATION FOR STATE FINANCIAL AID
(CASFA) FOR THE SEMESTER OR TERM FOR WHICH AN INCENTIVE IS CLAIMED
THAT INDICATES THAT THE STUDENT
'S HOUSEHOLD HAS AN ADJUSTED GROSS
INCOME THAT IS NINETY THOUSAND DOLLARS OR LESS
.
(d) "I
NCENTIVE" MEANS THE REFUNDABLE CREDIT ALLOWED BY THIS
SECTION
.
PAGE 4-HOUSE BILL 24-1340 (e) "QUALIFYING SEMESTER OR TERM" MEANS A SEMESTER OR TERM
THAT THE ELIGIBLE STUDENT
:
(I)
BEGINS WITH FEWER THAN SIXTY -SIX CREDIT HOURS
ACCUMULATED
, INCLUDING ALL CREDITS TRANSFERRED TO THE COLORADO
PUBLIC INSTITUTION OF HIGHER EDUCATION
, EXCEPT THOSE CREDITS EARNED
THROUGH PRIOR LEARNING ASSESSMENT
, CONCURRENT ENROLLMENT ,
ADVANCED PLACEMENT , THE INTERNATIONAL BACCALAUREATE PROGRAM ,
MILITARY CREDITS, OR ANY OTHER CREDITS ACCUMULATED PRIOR TO
MATRICULATION AT ANY INSTITUTION OF HIGHER EDUCATION
; AND
(II) COMPLETES EARNING AT LEAST SIX CREDIT HOURS OR
EQUIVALENT WITH A GRADE POINT AVERAGE OF
2.5 OR HIGHER.
(f) "S
CHOLARSHIPS OR GRANTS" MEANS THE SUM OF ANY AMOUNT
PAID FOR THE BENEFIT OF AN ELIGIBLE STUDENT THAT ARE REQUIRED TO BE
TAKEN INTO ACCOUNT PURSUANT TO SECTION
25A (g)(2) OF THE INTERNAL
REVENUE CODE
.
(g) "T
UITION AND FEES" HAS THE SAME MEANING AS "QUALIFIED
TUITION AND RELATED EXPENSES
" AS DEFINED IN SECTION 25A (f)(1) OF THE
INTERNAL REVENUE CODE THAT ARE PAID BY OR FOR THE BENEFIT OF AN
ELIGIBLE STUDENT
.
(3) (a) F
OR EACH INCOME TAX YEAR COMMENCING ON OR AFTER
JANUARY 1, 2025, BUT PRIOR TO JANUARY 1, 2033, AN ELIGIBLE STUDENT IS
ALLOWED AN INCENTIVE AGAINST THE INCOME TAXES IMPOSED BY THIS
ARTICLE
22 FOR EVERY QUALIFYING SEMESTER OR TERM COMPLETED DURING
THE ACADEMIC YEAR ENDING DURING THE INCOME TAX YEAR
.
(b) T
HE AMOUNT OF INCENTIVE ALLOWED TO AN ELIGIBLE STUDENT
FOR EACH INCOME TAX YEAR IS EQUAL TO THE AMOUNT PAID BY OR FOR THE
BENEFIT OF THE ELIGIBLE STUDENT IN TUITION AND FEES TO A
COLORADO
PUBLIC INSTITUTION OF HIGHER EDUCATION MINUS ANY SCHOLARSHIPS OR
GRANTS FOR EACH QUALIFYING SEMESTER OR TERM DURING THE ACADEMIC
YEAR COMPLETED DURING THE PRIOR CALENDAR YEAR
.
(4) (a) E
ACH COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION
IS REQUIRED BY
JANUARY 15, 2026, AND EVERY JANUARY 15 THEREAFTER
UNTIL
2033, TO ELECTRONICALLY REPORT EACH ELIGIBLE STUDENT FOR ANY
PAGE 5-HOUSE BILL 24-1340 QUALIFYING SEMESTER OR TERM COMPLETED DURING THE ACADEMIC YEAR
COMPLETED DURING THE PRIOR CALENDAR YEAR TO THE DEPARTMENT OF
HIGHER EDUCATION IN A FORMAT PRESCRIBED BY THE DEPARTMENT OF
HIGHER EDUCATION THAT INCLUDES
:
(I) T
HE STUDENT'S TAX IDENTIFICATION NUMBER OR SOCIAL
SECURITY NUMBER
; AND
(II) THE AMOUNT OF TUITION AND FEES PAID MINUS ANY
SCHOLARSHIPS OR GRANTS
.
(b) B
Y JANUARY 31, 2026, AND EVERY JANUARY 31 THEREAFTER
THROUGH
2033, THE COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION
SHALL PROVIDE EACH ELIGIBLE STUDENT WITH A STATEMENT CONTAINING
THE INFORMATION PERTAINING TO THAT STUDENT
'S ELIGIBILITY AND THE
AMOUNT REPORTED TO THE DEPARTMENT OF HIGHER EDUCATION PURSUANT
TO SUBSECTION
(4)(a)(II) OF THIS SECTION.
(c) T
HE DEPARTMENT OF HIGHER EDUCATION IS REQUIRED BY
JANUARY 31, 2026, AND EVERY JANUARY 31 THEREAFTER THROUGH 2034,
TO ELECTRONICALLY REPORT THE INFORMATION RECEIVED PURSUANT TO
SUBSECTION
(4)(a) OF THIS SECTION ALONG WITH ANY LATER CORRECTIONS
OR ADDITIONS TO THE DEPARTMENT OF REVENUE IN A FORMAT PRESCRIBED
BY THE EXECUTIVE DIRECTOR
.
(5) T
HE AMOUNT OF THE INCENTIVE ALLOWED UNDER THIS SECTION
THAT EXCEEDS THE ELIGIBLE STUDENT
'S INCOME TAXES DUE IS REFUNDED TO
THE TAXPAYER
.
(6) (a) T
HE DEPARTMENT OF HIGHER EDUCATION , IN CONSULTATION
WITH
COLORADO PUBLIC INSTITUTIONS OF HIGHER EDUCATION , SHALL
DETERMINE EACH INSTITUTION
'S AVERAGE PERCENTAGE OF STATE AND
INSTITUTIONAL FINANCIAL AID ALLOCATED TO THE RESIDENT STUDENT
POPULATION WHO HAVE A FAMILY INCOME OF NINETY THOUSAND DOLLARS
OR LESS IN EACH YEAR OF THE THREE YEARS PRIOR TO
2025.
(b) E
ACH COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION
SHALL MAINTAIN A PERCENTAGE OF STATE AND INSTITUTIONAL FINANCIAL
AID TO RESIDENT STUDENTS WHO HAVE AN ADJUSTED GROSS HOUSEHOLD
INCOME OF NINETY THOUSAND DOLLARS OR LESS THAT IS EQUAL TO OR
PAGE 6-HOUSE BILL 24-1340 GREATER THAN THE AVERAGE PERCENTAGE OF STATE AND INSTITUTIONAL
FINANCIAL AID CALCULATED BY THE DEPARTMENT OF HIGHER EDUCATION IN
EACH OF THE THREE ACADEMIC YEARS PRIOR TO THE ACADEMIC YEAR
2024-25.
(c) I
F AN INSTITUTION DOES NOT MAINTAIN THE PERCENTAGE , THE
INSTITUTION SHALL NOTIFY THE DEPARTMENT OF HIGHER EDUCATION BY A
DATE DETERMINED BY THE DEPARTME NT OF HIGHER EDUCATION AND MUST
INCLUDE IN THE NOTIFICATION A DESCRIPTION OF CHANGES TO
INSTITUTIONAL FINANCES OR THE STUDENT POPULATION THAT PREVENTED
THE INSTITUTION FROM MAINTAINING THE STATE AND INSTITUTIONAL
FINANCIAL AID ALLOCATION PERCENTAGE
. THE DEPARTMENT OF HIGHER
EDUCATION SHALL INCLUDE THIS INFORMATION IN ITS REPORT DESCRIBED IN
SUBSECTION
(7)(d) OF THIS SECTION.
(d) O
N OR BEFORE JUNE 30, 2027, AND EACH YEAR THEREAFTER
UNTIL
2037, THE DEPARTMENT OF HIGHER EDUCATION SHALL SUBMIT A
REPORT TO THE JOINT BUDGET COMMITTEE AND THE HOUSE OF
REPRESENTATIVES AND SENATE EDUCATION COMMITTEES
, OR ANY
SUCCESSOR COMMITTEES
, INCLUDING, FOR EACH INSTITUTION, THE AVERAGE
PERCENTAGE OF STATE AND INSTITUTIONAL FINANCIAL AID ALLOCATED TO
THE RESIDENT STUDENT POPULATION WHO HAVE A FAMILY INCOME OF
NINETY THOUSAND DOLLARS OR LESS IN THE THREE ACADEMIC YEARS PRIOR
TO THE ACADEMIC YEAR
2024-25, AND IN EACH ACADEMIC YEAR
THEREAFTER UNTIL
2034. THE DEPARTMENT OF HIGHER EDUCATION SHALL
INCLUDE IN THE REPORT STUDENT ENROLLMENT INFORMATION FOR ELIGIBLE
AND NON
-ELIGIBLE STUDENTS, DISAGGREGATED BY INCOME , AND SHALL
INCLUDE
, ONCE THE DATE IS AVAILABLE , DISAGGREGATED OUTCOME
MEASURES BY INCOME FOR ELIGIBLE AND NON
-ELIGIBLE STUDENTS,
INCLUDING BUT NOT LIMITED TO STUDENT RETENTION AND COMPLETION
RATES
. EACH COLORADO PUBLIC INSTITUTION OF HIGHER EDUCATION SHALL
ANNUALLY REPORT STUDENT LEVEL FINANCIAL AID
, STUDENT ELIGIBILITY,
AND INCENTIVE ELIGIBILITY INFORMATION TO THE DEPARTMENT OF HIGHER
EDUCATION THAT THE DEPARTMENT OF HIGHER EDUCATION DEEMS
NECESSARY TO PROVIDE TO THE DEPARTMENT OF REVENUE FOR INCENTIVE
ADMINISTRATION OR FOR INCLUSION IN THE REPORT
.
(7) T
HIS SECTION IS REPEALED, EFFECTIVE DECEMBER 31, 2037.
SECTION 2. Appropriation. (1) For the 2024-25 state fiscal year,
PAGE 7-HOUSE BILL 24-1340 $101,756 is appropriated to the department of higher education for use by
the Colorado commission on higher education and higher education special
purpose programs. This appropriation is from the general fund and is based
on the assumption that the commission will require an additional 1.3 FTE.
To implement this act, the commission may use this appropriation for
administration.
SECTION 3. 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 8-HOUSE BILL 24-1340 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 9-HOUSE BILL 24-1340