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April 11, 2024 HB 24-1439
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-1124
Rep. Willford
Sen. Coleman
Date:
Bill Status:
Fiscal Analyst:
April 11, 2024
House Finance
Erin Reynolds | 303-866-4146
Louis Pino | 303-866-3356
Bill Topic: FINANCIAL INCENTIVES EXPAND APPRENTICESHIP PROGRAMS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill creates a state income tax credit, repeals another, and creates two grant
programs in the Department of Labor and Employment to support apprenticeships. It
creates two one-time transfers, decreases state revenue, and increases state revenue
through FY 2034-35.
Appropriation
Summary:
For FY 2024-25, the bill requires an appropriation of $103,515 to the Department of
Labor and Employment. The Scale-Up Grant Fund and the Qualified Apprenticeship
Intermediary Grant Fund are continuously appropriated to the CDLE.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 24-1439
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Revenue General Fund ($15,000,000) ($30,000,000) ($30,000,000)
Total Revenue ($15,000,000) ($30,000,000) ($30,000,000)
Expenditures
1
General Fund $103,515 $107,397 $63,108
Cash Funds $1,333,333 $1,333,333 $1,333,333
Centrally Appropriated $60,774 $60,774 $60,774
Total Expenditures $1,497,622 $1,501,504 $1,457,215
Total FTE 3.3 FTE 3.3 FTE 3.3 FTE
Transfers General Fund ($4,000,000) - -
Cash Funds $4,000,000 - -
Net Transfer $0 - -
Other Budget Impacts TABOR Refund ($15,000,000) ($30,000,000) ($30,000,000)
General Fund Reserve $15,527 $16,110 $9,466
1
Cash fund expenditures are assumed to occur evenly over three years, but the exact timing of spending may differ.
See State Expenditures section for more detail. Page 2
April 11, 2024 HB 24-1439
Summary of Legislation
The bill creates a state income tax credit, repeals another, and creates two grant programs in the
Department of Labor and Employment (CDLE) to support apprenticeships.
Apprenticeship tax credit. The bill creates a state income tax credit for a taxpayer operating in
a new and emerging industry and who has registered an apprenticeship program and received a
certificate from the State Apprenticeship Agency (SAA) in CDLE, or is an employer registered in
the Colorado State Apprenticeship Resource Directory.
The credit is equal to $6,300 per apprentice that has worked at least six months for the taxpayer.
The taxpayer may claim an additional $1,050 per apprentice for each additional month of
employment, up to $12,600 per income tax year. The taxpayer may not claim more than
ten apprentices per income tax year and cannot claim the same apprentice for more than
two consecutive years
The state credit is available for income tax years 2025 through 2034 and is refundable, meaning
if the taxpayer’s state tax liability is less than the amount of the credit allowed, the remaining
amount is refunded to the taxpayer.
The credit is administered by the SAA, and the amount of credits they can issue to qualified
taxpayers is capped at $30 million per calendar year. The SAA is required to maintain a database
to evaluate the effectiveness of the income tax credit and share the information with the state
auditor for their required evaluations of state tax expenditures.
If the amount of requested credits equals or exceeds annual cap, the SAA must notify all
taxpayers applying for the credit that the limit has been met and will be notified if additional
credits become available. Pending applications will remain in the queue for up to years and stay
in the order received.
Finally, if the taxpayer has claimed the apprentice for the Colorado Job Growth Incentive Tax
Credit, Enterprise Zone Business Employees Credit, Rural Jumpstart Zone New Business Income
Credit and/or the Rural Jumpstart Zone New Hire Income Tax Credit, they many not claim the
apprentice for the apprenticeship tax credit.
Repeal of school-to-career tax credit. The bill repeals state income tax credit for qualified
investments made in a qualified school-to-career program beginning in tax year 2025.
Scale-Up Grant Program. The Scale-Up Grant Program is created in CDLE to award funding to
new or expanding registered apprenticeship programs through FY 2026-27. The newly created
Scale-Up Grant Fund receives a $2.0 million transfer from the General Fund in FY 2024-25 for
this purpose, and is continuously appropriated to the CDLE.
Qualified Apprenticeship Intermediary Grant Program. The Qualified Apprenticeship
Intermediary Grant Program is created in CDLE to award funding to qualified apprenticeship
intermediaries that connect employers or apprenticeship program participants to registered
apprenticeship programs or convene stakeholders to develop registered apprenticeship
programs. The newly created Qualified Apprenticeship Intermediary Grant Fund receives a Page 3
April 11, 2024 HB 24-1439
$2.0 million transfer from the General Fund in FY 2024-25 for this purpose, and is continuously
appropriated to the CDLE.
Reporting. For each grant program, the CDLE is required to collect and report certain data to
the General Assembly.
Assumptions
Beginning in tax year 2025, the fiscal note assumes the $30 million in annual apprenticeship tax
credits will be fully utilized each year the credit is available. Data from the U.S. Department of
Labor’s Registered Apprenticeship Partners Information Database System (RAPIDS) estimates
3,600 apprentices were working in a new and emerging industry and registered in a Colorado
Registered Apprenticeship Program (RAP) in 2023, a 33.6 percent increase from the prior year,
after growing by 51.2 percent from 2021 to 2022. Since 2021, the number of new apprentices
who began an apprenticeship and are registered in RAPIDS has increased by 31.6 percent.
State Revenue
Based on the assumptions above, the bill is expected to decrease General Fund revenue by
$15.0 million in the FY 2024-25 (half-year impact), $30.0 million in FY 2025-26, $30.0 million in
FY 2026-27, and by similar amounts through FY 2033-34, and half-year impact in FY 2034-35,
when the credit is set to end. The bill reduces income tax revenue, which is subject to TABOR. To
the extent fewer employers apply or qualify for the credit, the state revenue decrease will be less
than estimated in Table 1.
By repealing the school-to-career tax credit, state revenue is expected to minimally increase.
Since 2017, on average, 31 taxpayers have claimed the credit for almost $30,000 per tax year. In
tax year, 2021, the latest data available, eight taxpayers claimed the credit for a total of $5,311.
The bill may also increase revenue from gifts, grants, and donations, which have not been
identified as of writing. If received, these funds are not subject to TABOR.
State Transfers
On July 1, 2024, the bill transfers a total of $4.0 million from the General Fund as follows:
$2.0 million to the Scale-Up Grant Fund; and
$2.0 million to the Qualified Apprenticeship Intermediary Grant Fund.
Any funds remaining at the end of FY 2026-27 are transferred back to the General Fund.
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April 11, 2024 HB 24-1439
State Expenditures
The bill increases state expenditures in the CDLE and the DOR by about $1.5 million per year
from FY 2024-25 through FY 2026-27, paid from the General Fund and the newly created cash
funds. From FY 2027-28 through FY 2035-36, the bill increases General Fund expenditures by
$85,000 per year. Expenditures are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 24-1439
FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28
Department of Labor and Employment
1
Personal Services $236,337 $236,337 $236,337 $50,676
Operating Expenses $4,224 $4,224 $4,224 $1,024
Capital Outlay Costs $20,010 - - -
Computer Programming $44,400 - - -
Software Licenses $12,240 $12,240 $12,240 $1,530
Grant Program $1,119,637 $1,136,312 $1,136,312 -
Centrally Appropriated Costs
2
$60,774 $60,774 $60,774 $14,113
FTE – Personal Services 3.3 FTE 3.3 FTE 3.3 FTE 0.8 FTE
CDLE Subtotal $1,497,622 $1,449,887 $1,449,887 $69,893
Department of Revenue
GenTax Programming and Testing - $38,701 - -
Office of Research and Analysis - $7,392 $7,328 $7,328
Document Management and Tax Form
Change
- $5,524 - -
DOR Subtotal $0 $51,617 $7,328 $7,328
Total $1,497,622 $1,501,504 $1,457,215 $77,221
Total FTE 3.3 FTE 3.3 FTE 3.3 FTE 0.8 FTE
1
Costs in Table 2 assume grant funding will be spent over three fiscal years, after CDLE’s administrative costs.
2
Centrally appropriated costs are not included in the bill's appropriation.
Department of Labor and Employment. The CDLE requires staff and computer programming
to implement the bill.
Staff. The CDLE requires 3.3 FTE from FY 2024-25 to FY 2026-27, and 0.8 FTE through
FY 2035-36 to administer the grant programs and the tax credits. Grant program staff is paid
from the respective cash funds, and tax credit staff is paid from the General Fund. Page 5
April 11, 2024 HB 24-1439
Computer programming and software licenses. Computer programming is required in
CDLE’s Salesforce application to administer the tax credit, estimated at $44,400 in
FY 2024-25 only. Staff also require software licenses, totaling about $12,00 per year for
three years.
Grant program. After CDLE’s administrative costs, grant funding is expected at about
$1.1 million per year over three years for the two programs. Actual grant amounts and
awards will be determined by CDLE.
Department of Revenue. In FY 2025-26, the bill requires expenditures of $38,701 to program,
test, and update database fields in the Department of Revenue's GenTax software system.
Programming costs are estimated at $18,540, representing 80 hours of contract programming at
a rate of $231.75 per hour. Costs for testing include $13,825 for 395 hours of innovation,
strategy, and delivery programming support at a rate of $35 per hour, and $6,336 for 198 hours
of user acceptance testing at a rate of $32 per hour.
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 policy. These costs are estimated at $7,392, representing 231 hours for data management
and reporting at $32 per hour. The bill will also require form changes, which are made by the
Department of Personnel and Administration, at a cost of $5,524, reappropriated to that agency.
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.
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.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
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April 11, 2024 HB 24-1439
State Appropriations
For FY 2024-25, the bill requires an appropriation of $103,515 from the General Fund to the
Department of Labor and Employment, and 0.8 FTE.
The Scale-Up Grant Fund and the Qualified Apprenticeship Intermediary Grant Fund are
continuously appropriated to the CDLE.
State and Local Government Contacts
Information Technology Labor and Employment Law
Revenue Treasury
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.