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June 27, 2024 HB 24-1365
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0727
Rep. Lukens; Soper
Sen. Bridges; Will
Date:
Bill Status:
Fiscal Analyst:
June 27, 2024
Signed into Law
Brendan Fung | 303-866-4781
Emily Dohrman | 303-866-3687
Bill Topic: OPPORTUNITY NOW GRANTS & TAX CREDIT
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill continues funding to the Regional Talent Development Initiative Grant
Program, creates the Regional Talent Summit Grant Program, and establishes a
workforce shortage tax credit. It makes a one-time transfer from the General Fund,
decreases state revenue through tax year 2032, and increases expenditures starting in
FY 2024-25.
Appropriation
Summary:
For FY 2024-25, the bill requires and includes an appropriation of $109,603 to the
Office of Economic Development and International Trade.
Fiscal Note
Status:
This final fiscal note reflects the enacted bill.
Table 1
State Fiscal Impacts Under HB 24-1365
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Revenue General Fund - ($7,500,000) ($15,000,000)
Cash Funds $12,100 $129,200 $129,200
Total Revenue $12,100 ($7,370,800) ($14,870,800)
Expenditures General Fund $109,603 - $48,719
Cash Funds $4,012,100 $115,041 $115,041
Centrally Appropriated $18,534 $23,168 $23,168
Total Expenditures $4,140,237 $138,209 $186,928
Total FTE 0.8 FTE 1.0 FTE 1.0 FTE
Transfers General Fund ($4,000,000) - -
Cash Funds $4,000,000 - -
Net Transfer $0 - -
Other Budget Impacts TABOR Refund $12,100 ($7,370,800) not estimated
General Fund Reserve $16,440 - $7,308 Page 2
June 27, 2024 HB 24-1365
Summary of Legislation
The bill extends funding to the Regional Talent Development Initiative Grant Program, also
known as Opportunity Now Colorado, to continue awarding grants to programs that connect
Coloradans to in-demand, high-skill, and high-wage occupations. The Regional Talent Summit
Grant Program is also created in the Office of Economic Development and International Trade
(OEDIT) to convene regional talent summits across the state. Lastly, the bill establishes a
workforce shortage tax credit for infrastructural and equipment improvements to training
programs that alleviate worker shortages.
Regional Talent Development Initiative Grant Program (Opportunity Now Colorado). The
bill transfers $3.8 million on July 1, 2024, from the General Fund to the Regional Talent
Development Initiative Grant Program Cash Fund to fund Phase III of the program, which
addresses workforce shortages in infrastructure and building trades. No more than seven
percent of transferred funds may be used for program administration costs by OEDIT.
Regional Talent Summit Grant Program. The bill creates the Regional Talent Summit Grant
Program in OEDIT to provide grants to a program facilitator and regional hosts that convene
regional talent summits across the state. OEDIT must administer the program in partnership with
a program facilitator that receives a grant to engage with stakeholders, analyze job market
metrics, and develop recommendations for regional workforce needs.
The office must also work collaboratively with a selection committee to award grants to regional
hosts that secure locations, determine relevant participants, and gather insights for talent
summits. To be considered for a grant, a regional host must meet certain criteria and submit an
application that details the proposed summit’s economic development goals. The selection
committee must consider regional diversity, community engagement, local partnerships, and
event capacity when selecting grant recipients.
The bill creates the Regional Talent Summit Grant Program Cash Fund and transfers $200,000 on
July 1, 2024 from the General Fund to the fund. Money in the cash fund is continuously
appropriated to OEDIT to administer the program and award grants. The program repeals on
July 1, 2030.
Workforce Shortage Tax Credit. The bill creates a state income tax credit for tax years 2026
through 2032 for expenses for facility improvement and equipment acquisition costs associated
with training programs designed to alleviate worker shortages. Applicants must apply for a tax
credit reservation from OEDIT, and, once the investment costs are incurred, submit evidence of
compliance and certification of expenditures to receive a tax credit certificate. OEDIT may levy
an application and issuance fee to cover program implementation and administration.
The tax credit is equal to 50 percent or less of the qualified investment, and the total amount of
tax credit reservations cannot exceed $15 million per year. Beginning in tax year 2026, if either
the Office of State Planning and Budgeting or Legislative Council Staff forecast in the preceding
September expects that revenue subject to TABOR will not increase by more than 4 percent in
the current fiscal year, then OEDIT may not issue more than $7.5 million in tax credit reservations
in the following tax year. Page 3
June 27, 2024 HB 24-1365
Additionally, the bill creates the Workforce Development Tax Credit Program Cash Fund to
administer the tax credit. The fund consists of fee revenue, gifts, grants, donations, and any
other funds appropriated by the General Assembly. Money in the cash fund is continuously
appropriated to OEDIT.
Background
The Regional Talent Development Initiative Grant Program, now known as Opportunity Now
Colorado, is an $85 million grant program created through HB 22-1350 in OEDIT. The program
provides funding to promote change through the alignment and collaboration between
Colorado’s secondary and post-secondary education systems and the workforce with a focus on
enhancing economic mobility.
Opportunity Now Colorado consists of three phases of funding:
Phase One: by June 2023, the program received 425 grant applications and awarded
$27 million to 46 recipients across the state. Grantees received between $50,000 and
$7 million each, and primarily represented the education, healthcare, and infrastructure
industries.
Phase Two: between August 2023 and March 2024, the program received an additional 227
grant applications and awarded $55 million to 43 recipients across the state.
Phase Three: anticipated to begin mid-2024.
State Revenue
The bill increases cash fund revenue beginning in FY 2024-25 and decreases General Fund
revenue beginning in FY 2025-26. All impacted revenue is subject to the state TABOR limit.
Revenue changes are shown in Table 2 and discussed below.
Table 2
Revenue Changes Under HB 24-1365
Fund FY 2024-25 FY 2025-26 FY 2026-27
Workforce Shortage Tax Credit General Fund - ($7,500,000) ($15,000,000)
Issuance Fee Cash Fund - $105,000 $105,000
Application Fee Cash Fund $12,100 $24,200 $24,200
Total Revenue $12,100 ($7,370,800) ($14,870,800)
Workforce Shortage Tax Credit. Based on estimated demand for funding, this fiscal note
assumes that the amount reserved and issued each year will reach the $15 million cap. Tax credit
certificates may be issued beginning in tax year 2026. The credit is expected to reduce General
Fund revenue from the income tax by $7.5 million in FY 2025-26, representing an accrued
half-year impact for tax year 2026, and $15 million in FY 2026-27, the first full year. The credit
will continue through FY 2032-33, when a final half-year impact will be incurred. Page 4
June 27, 2024 HB 24-1365
Issuance fees. OEDIT may impose an issuance fee of up to three percent of the amount of the
tax credit certificate at the time that the tax credit certificate is issued to the applicant. The fiscal
note assumes that OEDIT will impose a fee of 1.4 percent in FY 2025-26 and 0.7 percent in
FY 2026-27 and later years, to approximate their costs.
Application fees. OEDIT may impose an application fee of up to $200 for applications
requesting a tax credit of $250,000 or less, and a fee of up to $500 for applications requesting a
tax credit of more than $250,000. The fiscal note assumes OEDIT will charge the maximum fee,
and that the office will receive up to 11 applications requesting credits of less than $250,000 and
up to 44 applications requesting credits for more than $250,000. Actual revenue will vary
depending on the number of applicants.
State Transfers
On July 1, 2024, the bill transfers $3.8 million from the General Fund to the Regional Talent
Development Initiative Grant Program Cash Fund and $200,000 from the General Fund to the
Regional Talent Summit Grant Program Cash Fund.
State Expenditures
The bill increases state expenditures in OEDIT and the Department of Revenue by about
$4.1 million in FY 2024-25, about $138,000 in FY 2025-26, and about $187,000 in FY 2026-27,
paid from various cash funds in OEDIT and the General Fund. Expenditures are shown in Table 3
and detailed below.
Table 3
Expenditures Under HB 24-1365
FY 2024-25 FY 2025-26 FY 2026-27
OEDIT
Personal Services $91,009 $113,761 $113,761
Operating Expenses $1,024 $1,280 $1,280
Capital Outlay Costs $6,670 - -
Salesforce Development $23,000 - -
Opportunity Now Administration Costs $266,000 - -
Opportunity Now Grants $3,534,000 - -
Regional Talent Summit Grants $200,000 - -
Centrally Appropriated Costs
1
$18,534 $23,168 $23,168
FTE – Personal Services 0.8 FTE 1.0 FTE 1.0 FTE
OEDIT Subtotal $4,140,237 $138,209 $138,209
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June 27, 2024 HB 24-1365
Table 3
Expenditures Under HB 24-1365 (Cont.)
FY 2024-25 FY 2025-26 FY 2026-27
Department of Revenue
GenTax Programming - - $18,540
Systems Support Office - - $13,510
Office of Research and Analysis - - $7,392
User Acceptance Testing - - $6,176
Document Management - - $3,101
Department of Revenue Subtotal - - $48,719
Total Costs $4,140,237 $138,209 $186,928
Total FTE 0.8 FTE 1.0 FTE 1.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Office of Economic Development and International Trade. In FY 2024-25, expenditures in
OEDIT will increase by about $4.1 million paid from the General Fund, the Regional Talent
Summit Grant Program Cash Fund, the Regional Talent Development Initiative Grant Program
Fund, and, in part, from tax credit application fee revenue in the Workforce Development Tax
Credit Cash Fund. Beginning in FY 2025-26, expenditures will increase by about $138,000, paid
entirely from the Workforce Development Tax Credit Cash Fund in OEDIT.
Staff. Starting in FY 2024-25, OEDIT requires 1.0 FTE Program Manager III to evaluate tax
credit applications, administer the credit, develop program materials, and communicate the
tax incentive program. Staff costs and FTE are prorated in the first year based on the bill’s
effective date.
Salesforce development. OEDIT uses the management software Salesforce to oversee
program applicants, analytics, and application development. In FY 2024-25, OEDIT requires
an estimated $23,000 to integrate the new tax credit program into Salesforce.
Opportunity Now Colorado. After administrative costs set at seven percent of the total
transfer, about $3.5 million will be available for grants to fund Phase III of the Regional
Talent Development Initiative Grant Program (Opportunity Now Colorado). It is assumed that
grants will be awarded in FY 2024-25 to align with the program’s anticipated timelines.
Regional Talent Summit Grants. Beginning in FY 2024-25, $200,000 will be available for
Regional Talent Summit grants to a program facilitator and regional summit hosts to
facilitate talent summits across the state. It is assumed that grants will be awarded in
FY 2024-25.
Legal services. OEDIT may require legal services, provided by the Department of Law, which
can be accomplished within existing legal services appropriations. Legal counsel is related to
rulemaking, implementation, and ongoing administration of the program. Page 6
June 27, 2024 HB 24-1365
Department of Revenue. Starting in FY 2026-27, expenditures will increase in DOR by about
$49,000 to update tax forms, test programming changes, and evaluate the new tax credit.
Computer programming and testing. In FY 2026-27 only, workload in DOR will increase to
update the GenTax software system and additional testing. Programming costs are
estimated at $18,540, representing 80 hours of contract programming at a rate of $231.75
per hour. Costs for testing at the department include $13,510 for 386 hours of innovation,
strategy, and delivery programming support at a rate of $35 per hour, and $6,176 for
193 hours of user acceptance testing at a rate of $32 per hour.
Data reporting. Starting in FY 2026-27, costs in the Office of Research and Analysis will
increase by about $7,400 to collect and report data on the new tax credit.
Document management and tax form changes. In FY 2026-27 only, costs in DOR will
increase by about $3,100 to update tax forms for paper filings. Expenditures for form
changes occur in the Department of Personnel and Administration using reappropriated
funds.
State Auditor. Starting in FY 2025-26, workload in the Office of the State Auditor will increase
to measure the effectiveness of the tax credit in achieving the program’s goals. This workload is
expected to be minimal and no change in appropriation is required.
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 2.
Other Budget Impacts
TABOR refunds. In FY 2024-25, the bill increase state cash fund revenue subject to TABOR and
in FY 2025-26 it will, on net, decrease state revenue subject to TABOR by the amounts shown in
the State Revenue section above. However, the amount refunded to taxpayers may be higher
than this estimate if OEDIT sets fees higher than assumed in this fiscal note. This estimate
assumes the December 2023 LCS revenue forecast. A forecast of state revenue subject to TABOR
is not available beyond FY 2025-26.
The bill decreases General Fund subject to TABOR, which will decrease the amount of General
Fund revenue required to be refunded to taxpayers with no net impact on the amount available
for the General Fund budget.
The bill increases cash fund revenue subject to TABOR, which will increase the amount of
General Fund revenue required to be refunded to taxpayers, correspondingly decreasing the
amount available for the General Fund budget.
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June 27, 2024 HB 24-1365
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.
Technical Note
The bill requires the State Treasurer to transfer of $4.0 million from the General Fund on
July 1, 2024. However, the bill does not take effect until August 2024, assuming no referendum
petition is filed.
Effective Date
The bill was signed into law by the Governor on June 7, 2024 date, and takes effect on
August 7, 2024, assuming no referendum petition is filed.
State Appropriations
For FY 2024-25, the bill requires and includes a General Fund appropriation of $109,603 to the
Office of Economic Development and International Trade, and 0.8 FTE.
State and Local Government Contacts
Higher Education Labor Local Affairs
Office of Economic Development Personnel Revenue
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.