HOUSE BILL 24-1453
BY REPRESENTATIVE(S) Ricks, Bacon, Duran, English, Epps, Hamrick,
Joseph, Lieder, Lindsay, Lindstedt, Lukens, Mabrey, Titone, Velasco, Vigil,
Woodrow, McCluskie;
also SENATOR(S) Coleman and Kolker, Bridges, Cutter, Exum,
Jaquez Lewis, Michaelson Jenet, Priola, Sullivan.
C
ONCERNING THE RELOCATION OF THE CLIMBER ACT FROM THE
DEPARTMENT OF THE TREASURY TO THE OFFICE OF ECONOMIC
DEVELOPMENT
.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. In Colorado Revised Statutes, add with amended
and relocated provisions part 6 of article 48.5 of title 24 as follows:
PART 6
COLORADO LOANS FOR INCREASING MAIN STREET
BUSINESS ECONOMIC RESILIENCY ACT
24-48.5-601. [Formerly 24-36-201] Short title. The short title of
this part 2
PART 6 is the "Colorado Loans for Increasing Main Street
Business Economic Recovery RESILIENCY Act" or "CLIMBER Act".
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. 24-48.5-602. [Formerly 24-36-202] Legislative declaration.
(1) The general assembly hereby finds and declares that:
(a) There are nearly one hundred forty thousand small businesses
with employees in Colorado;
(b) Small businesses in Colorado make up a disproportionately
larger share of the economy of the state compared to the United States as a
whole;
(c) Small businesses collectively employed over one million
Coloradans before the public health crisis caused by COVID-19 began;
(d) The COVID-19 pandemic has harmed public health and
economic conditions across the entire world, including the state of
Colorado, across metropolitan regions, small towns, and rural communities,
and has had a particularly deep negative financial impact on small
businesses, their employees, and their home communities;
(e) The wide-ranging
AND CONTINUING health and economic impacts
of the COVID-19 pandemic are unprecedented in recent history and create
unique challenges for the state;
(f) The health, safety, and welfare of the people of the state depend
on the recovery of the state's economy, including the small businesses that
make up a significant share of that economy;
(g) On March 27, 2020, the president of the United States signed the
federal "Coronavirus Aid, Relief, and Economic Security Act", also known
as the "CARES Act", Pub.L. 116-136, to provide necessary federal funding
for COVID-19 response and recovery;
(h) The CARES Act, along with other federal laws and programs,
provided many critical resources for small businesses, but those resources
are not expected to be sufficient to sustain the large and diverse small
business community in the state as it recovers over the next few years
from
the COVID-19 crisis
AND THE RESULTING ONGOING ECONOMIC HARDSHIPS ;
(i) The governor's council on economic stabilization and growth,
made up of volunteers from the private, public, and philanthropic sectors
PAGE 2-HOUSE BILL 24-1453 with diverse backgrounds from across Colorado, has recommended that the
state seed the establishment of a fund of over one hundred million dollars
to stimulate loans from lending institutions doing business in Colorado to
Colorado small businesses to support the state's recovery and resiliency
from the effects of the COVID-19 pandemic;
(j) There is a well-functioning network of respected lending
institutions across the state who are committed to the health of Colorado's
economy and want to contribute their expertise and community
relationships to support the success of Colorado's small business
community;
(k) The state will rely on those lending institutions as essential
partners in a small business recovery loan program; and
(l) Authorizing the creation of a small business recovery
AND
RESILIENCY
loan program seeded by money provided by the state will
support Colorado small businesses affected by the COVID-19 crisis, and
assist in the overall economic recovery of the state, AND SUPPORT
RESILIENCY FOR SMALL BUSINESSES AS NEW CHALLENGES EMERGE
.
(2) The general assembly further finds and declares that:
(a) While the loan program authorized by this part 2
PART 6 will be
predominately capitalized by private sector investments, the limited use of
state money obtained through the sale of insurance premium tax credits that
will result in future state tax expenditures incurred for the purpose of
supporting the program will, under the current economic conditions, result
in the formation of more private capital at better terms for small business
borrowers than would otherwise be available;
(b) The loan program, if successful, has the potential to help small
businesses survive the crisis caused by
THE COVID-19 pandemic, and to
protect jobs across the state, AND SUPPORT RESILIENCY FOR SMALL
BUSINESSES AS NEW CHALLENGES EMERGE
, which in turn will generate and
sustain tax revenues to both the state and local governments;
(c) Preserving jobs with small businesses will also reduce public
expenditures on safety net programs and other forms of assistance needed
by those who have become unemployed as a result of the crisis caused by
PAGE 3-HOUSE BILL 24-1453 COVID-19;
(d) The state money contributed to the loan program therefore serves
an important and discrete public purpose in securing the state's economic
and overall recovery from the crisis caused by COVID-19
AND IN ENSURING
THE STATE
'S RESILIENCY AMONG SMALL BUSINESSES AS NEW CHALLENGES
EMERGE
; and
(e) Supporting the state's recovery from the crisis caused by
COVID-19
AND ENSURING THE STATE 'S RESILIENCY AMONG SMALL
BUSINESSES AS NEW CHALLENGES EMERGE
is the primary purpose of the loan
program and outweighs any benefit to private individuals or entities.
(3) The general assembly further finds and declares that:
(a) The insurance premium tax credits authorized by this part 2
PART
6 as a method to provide money to the loan program are available only to
insurance companies that incur premium tax liability in the state;
(b) The tax credits can only be used by an insurance company to
offset tax liability actually incurred by the insurance company;
(c) The tax credits are not refundable and do not impose an
obligation of payment in any future year upon the state;
(d) The use of proceeds from the sale of insurance premium tax
credits to seed the loan program allows the state to accomplish this
important public purpose through the use of future tax expenditures and
therefore:
(I) Does not require the state to borrow money, extend or pledge the
state's credit, or obligate the state to make future payments from state
revenues; and
(II) Does not otherwise create any multiple-fiscal year direct or
indirect district debt or other financial obligation whatsoever for purposes
of section 20 (4)(a) of article X of the state constitution.
24-48.5-603. [Formerly 24-36-203] Definitions. As used in this part
2 PART 6, unless the context otherwise requires:
PAGE 4-HOUSE BILL 24-1453 (1) "Colorado credit reserve" means the Colorado credit reserve
program described in section 24-46-104 (1)(n).
(2) "Contract" means a contract entered into by the state treasurer
OFFICE OF ECONOMIC DEVELOPMENT in accordance with section 24-36-205
(1) SECTION 24-48.5-605 (1).
(3) "Department" means the department of the treasury.
(4) "Eligible borrower" means a business that, as determined by the
oversight board:
(a) Has its principal place of business in the state;
(b) Has at least one but fewer than one hundred employees;
(c) Can demonstrate that it had at least one year of positive cash
flow as determined by the oversight board; and
(d) Can demonstrate that it has a current debt-service coverage ratio
of at least one-to-one or a higher level as determined by the oversight board.
(5) "Loan program" means a
THE small business recovery AND
RESILIENCY
loan program established in accordance with section 24-36-205SECTION 24-48.5-605.
(6) "Loan program manager" means an entity the state treasurer
OFFICE OF ECONOMIC DEVELOPMENT contracts with to establish and
administer the loan program in accordance with section 24-36-205 (2)
SECTION 24-48.5-605 (2).
(7) "Office" of economic development means the Colorado office
of economic development created in section 24-48.5-101.
(8) "Oversight board" means the small business recovery
AND
RESILIENCY
loan program oversight board created in section 24-36-204
SECTION 24-48.5-604.
(9) "Premium tax liability" means the liability imposed by section
10-3-209 or 10-6-128, or, in the case of a repeal or reduction by the state of
PAGE 5-HOUSE BILL 24-1453 the liability imposed by section 10-3-209 or 10-6-128, any other tax liability
imposed upon an insurance company by the state.
(10) "Qualified taxpayer" means an insurance company authorized
to do business in Colorado that has premium tax liability owing to the state
and that purchases a tax credit under this part 2
PART 6. "Qualified
taxpayer" also includes an insurance company that receives or assumes a tax
credit transferred in accordance with section 24-36-206 (7)(e) or 24-36-207
(6), SECTION 24-48.5-606 (7)(e) OR 24-48.5-607 (6), or that receives or
assumes a tax credit as an affiliate of a qualified taxpayer or transferee. For
purposes of this subsection (10)
PART 6, "affiliate" has the same meaning
as set forth in section 10-3-801 (1).
(11) "Small business recovery
AND RESILIENCY fund" or "fund"
means the small business recovery
AND RESILIENCY fund established in
section 24-36-208
SECTION 24-48.5-608.
(12) "Small business recovery tax credit" or "tax credit" means the
tax credit created in section 24-36-206 SECTION 24-48.5-606.
(13) "Tax credit sale proceeds" or "sale proceeds" means the money
or other liquid asset acceptable to the state treasurer that a qualified
taxpayer pays to the department
AND that is deposited in the small business
recovery
AND RESILIENCY fund.
24-48.5-604. [Formerly 24-36-204] Small business recovery and
resiliency loan program oversight board - creation - report. (1) The
small business recovery
AND RESILIENCY loan program oversight board is
hereby created in the department
DIVISION OF BUSINESS FUNDING AND
INCENTIVES WITHIN THE OFFICE
to help establish and oversee the terms and
conditions of a contract or contracts through which the treasurer
OFFICE may
provide first loss capital to a loan program or the Colorado credit reserve.
This section does not prohibit a loan program manager of a specific loan
program or the Colorado credit reserve from establishing a separate
investment advisory committee for that loan program.
(2) (a) The oversight board consists of five members, as follows:
(I) The state treasurer or the state treasurer's designee;
PAGE 6-HOUSE BILL 24-1453 (II) The director of the minority business office created in section
24-49.5-102, on behalf of the office of economic development, or the
director's designee;
(III) One member appointed by the speaker of the house of
representatives;
(IV) One member appointed by the president of the senate; and
(V) One member appointed by the governor.
(b) The appointing authorities shall make their initial appointments
to the oversight board no later than July 31, 2020.
(c) The members appointed pursuant to subsection (2)(a) of this
section must have substantial private sector experience in commercial
banking or capital market activities and must have obtained executive-level
positions in these industries.
(d) The chair of the governor's council on economic stabilization
and growth and the co-chairs of the council's financial services committee
shall consult with and provide recommendations on initial appointments to
the appointing authorities.
(3) Each member of the oversight board who is appointed pursuant
to subsection (2) of this section serves at the pleasure of the official who
appointed the member. The term of appointment is three years. An
appointed member may serve multiple terms. In the event of a vacancy in
an appointed position on the oversight board, a new member shall
MUST be
appointed in the same manner as provided in subsections (2)(a)(III) to
(2)(a)(V) of this section for the unexpired portion of the term.
(4) Each member of the oversight board serves without
compensation but is entitled to reimbursement for actual, reasonable, and
necessary expenses incurred in the performance of his or her
THE MEMBER'S
duties as a member of ON the oversight board.
(5) The state treasurer, or the state treasurer's designee, shall serve
SERVES as the chair of the oversight board.
PAGE 7-HOUSE BILL 24-1453 (6) The oversight board shall meet at least once every quarter. The
chair may call such additional meetings as are necessary for the oversight
board to complete its duties.
(7) The oversight board is a state public body subject to part 4 of
article 6 of this title 24. In addition to any other requirements, the oversight
board shall hold meetings open to the public, publish the agenda for each
meeting in advance, keep and publish minutes from each meeting, provide
advanced notification of meeting times to banking trade associations and
other groups that request notification, and receive written and public
testimony at each meeting.
(8) The oversight board's activities with regard to a contract or
contracts for the provision of state money for a loan program established in
accordance with section 24-36-205
SECTION 24-48.5-605 include, at a
minimum:
(a) Consulting with the state treasurer OFFICE AND THE DIVISION OF
BUSINESS FUNDING AND INCENTIVES WITHIN THE OFFICE
on the selection of
a loan program manager;
(b) In consultation with lending industry leaders and representatives
of small businesses, determining specific terms applicable to a loan program
as required in section 24-36-205
SECTION 24-48.5-605, which terms must
be designed in good faith to procure the participation of lending institutions
and be consistent with regulatory requirements and underwriting criteria,
including the duration of the geographic restriction of money in a loan
program;
(c) Providing guidance and input throughout the implementation of
a loan program;
(d) Establishing and publishing targets for the percentage of loans
supported by a loan program that are made to businesses owned by women,
minorities, and veterans and to businesses located in rural counties. In
establishing the targets required by this subsection (8)(d), the oversight
board shall consult with the minority business office within the office of the
governor and
WITH the division of business funding and incentives within
the office. of economic development
PAGE 8-HOUSE BILL 24-1453 (e) Regularly reviewing progress in achieving the targets established
pursuant to subsection (8)(d) of this section and making adjustments to a
loan program to help achieve the targets if needed; and
(f) Providing such additional oversight and creating policies and
procedures as may be necessary to ensure that the program complies with
the requirements of this part 2
PART 6 and fulfills its purpose PURPOSES of
supporting the state's recovery from the COVID-19 pandemic by assisting
Colorado small businesses in recovering from the crisis caused by
COVID-19
AND OF ENSURING RESILIENCY AMONG SMALL BUSINESSES AS
NEW CHALLENGES EMERGE
.
(9) The oversight board shall consult with small businesses in
establishing the criteria for eligible borrowers pursuant to section 24-36-203
(4) SECTION 24-48.5-603 (4).
(10) The oversight board shall adopt a conflict of interest policy for
its members in order to prevent those who serve on the board from profiting
or otherwise benefiting from eligible loans.
(11) A member of the oversight board may assist in raising money
or investments for a loan program without compensation.
(12) (a) The oversight board shall submit a written report on the
implementation of the loan program to the joint budget committee. The
oversight board shall submit its first report on or before November 30,
2020, and shall submit the report each six months thereafter for a period of
two years. After the report submitted November 30, 2022, the oversight
board shall submit the report annually, on or before November 30 of each
year. The oversight board shall also submit the report once each year in
fiscal years 2020-21 and 2021-22 to the business affairs and labor
committee of the house of representatives or any successor committee,
and
the business, labor, and technology committee of the senate, or any
successor committee
COMMITTEES. Notwithstanding the requirement in
section 24-1-136 (11)(a)(I), the requirement to submit the report required
in this subsection (11) continues until this section is repealed.
(b) The report must include, at a minimum, information on the
following:
PAGE 9-HOUSE BILL 24-1453 (I) The number and size of loans made;
(II) The geographic distribution of loans made;
(III) The distribution of loans made by business sector;
(IV) The demographics of the owners of the businesses receiving
loans, including the number of businesses owned by women, minorities, and
veterans;
(V) The number of loans made to rural businesses;
(VI) The size of the businesses receiving loans;
(VII) The number of people employed by the businesses receiving
loans;
(VIII) Distributions or revenue received by the state from the
program;
(IX) The financial performance of the fund;
(X) The default rates for loans made by the program;
(XI) Borrower interest rates on the loans and an explanation of how
the rates comply with the requirements of section 24-36-205 (4)(b)(V)
SECTION 24-48.5-605 (4)(b)(V); and
(XII) Any other information requested by the chair of the joint
budget committee,
OR BY the business affairs and labor committee of the
house of representatives or any successor committee,
or the business, labor,
and technology committee of the senate, or any successor committee
COMMITTEES.
(c) The oversight board shall make a presentation to a joint meeting
of the business affairs and labor committee of the house of representatives
and the business, labor, and technology committee of the senate, or any
successor committees, at least once each fiscal year or more often if
requested by the chairs of the committees.
PAGE 10-HOUSE BILL 24-1453 (13) This section is repealed, effective June 30, 2029.
24-48.5-605. [Formerly 24-36-205] Small business recovery and
resiliency loan program - creation - requirements - oversight.
(1) (a) The state treasurer OFFICE is authorized to enter into a contract or
contracts to establish a small business recovery
AND RESILIENCY loan
program in accordance with this part 2
PART 6.
(b) The purpose of the loan program is to support the state's
recovery from the economic crisis caused by COVID-19 through leveraging
private investment to support Colorado small businesses recovering from
the crisis caused by COVID-19 by making loans, acquiring participation
interest in loans, leveraging private small business lending through the
Colorado credit reserve program, or other activities that accomplish the
same purpose. T
HE LOAN PROGRAM IS ALSO DESIGNED TO SUPPORT
RESILIENCY FOR SMALL BUSINESSES AS NEW CHALLENGES EMERGE
. The loan
program shall
MAY only make loans directly if federal or state bank
regulators prohibit the banking industry from originating loans for the loan
program.
(2) The state treasurer
OFFICE may contract with the Colorado
housing and finance authority created in part 7 of article 4 of title 29 or with
a bank, nonprofit organization, nondepository community development
financial institution, business development corporation, certified public
accountant firm, or fund manager to administer a loan program. If the state
treasurer OFFICE contracts with an entity other than the Colorado housing
and finance authority to administer a loan program, the state treasurer
OFFICE shall use an open and competitive process to select the entity. The
state treasurer OFFICE shall consult with the director of the office of
economic development and the oversight board in selecting and contracting
with a loan program manager.
(3) (a) Notwithstanding any restriction on the investment of state
money set forth in section 24-36-113 or in any other provision of law,
subject to the availability of money in the small business recovery
AND
RESILIENCY
fund and the requirements of this part 2
PART 6, THE OFFICE
MAY PROVIDE FIRST LOSS CAPITAL TO A LOAN PROGRAM OR PROGRAMS OR
TO THE
COLORADO CREDIT RESERVE FROM THE SMALL BUSINESS RECOVERY
AND RESILIENCY FUND
.
PAGE 11-HOUSE BILL 24-1453 (I) In fiscal year 2020-21, the state treasurer may provide up to thirty
million dollars in first loss capital to a loan program or programs or to the
Colorado credit reserve from the small business recovery fund; and
(II) Subject to the limitations in subsection (3)(b) of this section, in
fiscal years 2021-22, 2022-23, and 2023-24, the state treasurer may provide
up to a total of forty million dollars in first loss capital to a loan program or
programs or to the Colorado credit reserve from the small business recovery
fund.
(b) The money provided under this subsection (3) must be provided
in tranches of ten million dollars or less. up to a maximum amount of fifty
million dollars in all tranches combined across fiscal years. 2020-21
through 2023-24. The state treasurer shall not provide a tranche to a loan
program or to the Colorado credit reserve until at least ninety percent of the
money in any prior tranche has been invested in small business loans in
accordance with subsection (4) of this section, as determined by the
oversight board and certified by the loan program manager. Money
provided to the Colorado credit reserve is considered invested in small
business loans for the purposes of this subsection (3)(b) once it is paid to
the Colorado housing and finance authority.
(4) Any contract for the administration of a loan program must
include the following terms in order to receive money provided by the state
treasurer OFFICE pursuant to subsection (3) of this section:
(a) Except for money contributed to the Colorado credit reserve, the
money
FROM THE SMALL BUSINESS RECOVERY AND RESILIENCY FUND
provided by the state treasurer
OFFICE in a single tranche shall MAY not be
committed pursuant to a contract relating to a loan program until money is
committed pursuant to a contract relating to a loan program from other
sources at a ratio of at least four dollars from other sources for each one
dollar provided by the state
FROM THE SMALL BUSINESS RECOVERY AND
RESILIENCY FUND
. If a loan program manager does not secure sufficient
investments from other sources to meet this requirement within the time
allowed by a contract, the money provided by the state shall
MUST be
returned to the small business recovery
AND RESILIENCY fund.
(b) Except for money contributed to the Colorado credit reserve,
once the money in a tranche is matched in accordance with subsection (4)(a)
PAGE 12-HOUSE BILL 24-1453 of this section, it must be used to make loans or purchase participation
interest in loans for working capital, including the purchase of equipment,
to eligible borrowers, or other activities that accomplish the same purpose.
The oversight board shall consult with lending industry leaders and
representatives of small businesses with regard to subsections (4)(b)(I) to
(4)(b)(VI) of this section. Each loan must be subject to the following terms:
(I) The loan must be in an amount of at least ten thousand dollars
but not more than five hundred thousand dollars, as determined by the
oversight board;
(II) The loan must have a maximum initial maturity of up to ten
years, based on the need of the eligible borrower, with no penalty for
prepayment, as determined by the oversight board. The originating lender
may extend the term for purposes of restructuring the loan;
(III) The principal must be amortized over the term of the loan or a
longer period, as determined by the oversight board;
(IV) Principal and interest payments may be deferred for up to one
year, as determined by the oversight board, with the unpaid interest being
capitalized. Deferrals must be limited to circumstances of hardship created
by the COVID-19 pandemic
OR BASED ON ONGOING ECONOMIC CONDITIONS .
(V) The loan must carry an interest rate that is lower than would
otherwise be available on a risk-adjusted basis from a commercial lender or
that bears terms that are not otherwise available from a commercial lender,
as determined by the oversight board; and
(VI) The eligible borrower may provide a personal guarantee,
collateral, or other security as determined by the oversight board, which
may be subordinate to existing debt.
(c) (I) In order to
TO ensure geographic equity, each tranche of loan
funding must be subject to an initial period of time in which a portion of the
money is allocated to each county on a basis proportional to the county's
share of small businesses relative to the state, the county's share of small
business employees relative to the state, the county's share of small business
personal property relative to the state, or other similar metrics as determined
by the oversight board, or based on a formula established under subsection
PAGE 13-HOUSE BILL 24-1453 (4)(c)(IV) of this section. The money allocated to each county must be
reserved for applications from eligible borrowers located in that county for
the initial period of time. For the purposes of this subsection (4)(c), an
eligible borrower is considered to be located in the county in which it has
its principal place of business, as reflected in its most recent filing with the
secretary of state or subject to such other documentation as the oversight
board establishes. The oversight board shall determine the amount of time
in which the money in each tranche is subject to a geographic restriction
under this subsection (4)(c)(I).
(II) Once the time period established by the oversight board under
subsection (4)(c)(I) of this section has passed, all money remaining in the
tranche is available to eligible borrowers on a statewide basis.
(III) For money contributed to the Colorado credit reserve, the
oversight board may waive the requirements of this subsection (4)(c) or
establish alternative geographic distribution requirements or targets.
(IV) For any tranche of loan funding, the oversight board may, in its
discretion, establish an alternative formula for the allocation of funds
MONEY to counties for purposes of subsection (4)(c)(I) of this section that
accounts for how affected each county has been by the COVID-19
pandemic and its impacts
OR BASED ON ONGOING ECONOMIC CONDITIONS .
(d) (I) A loan program manager shall make every effort to achieve
benchmarks published by the oversight board pursuant to section 24-36-204
(8)(d) SECTION 24-48.5-604 (8)(d) for the percentage of loans supported by
the program that are made to businesses owned by socially and
economically disadvantaged individuals, including businesses owned by
women, minorities, and veterans, and to businesses located in rural counties.
A loan program manager shall consult with the minority business office
within the office of the governor and the division of business funding and
incentives within the office of economic development
to develop an
outreach strategy for marketing the loan program to businesses owned by
women, minorities, and veterans and businesses located in rural counties.
(II) For money contributed to the Colorado credit reserve, the
oversight board may waive the requirements of this subsection (4)(d) or
may establish alternative benchmarks for the percentage of loans supported
by the program that are made to businesses owned by socially and
PAGE 14-HOUSE BILL 24-1453 economically disadvantaged individuals, including businesses owned by
women, minorities, and veterans, and to businesses located in rural counties.
(e) A loan program manager shall work with the division of business
funding and incentives within the office of economic development to align
the program with other access to capital programs in the state.
(5) If the money in a tranche is not fully invested in small business
loans as determined by the oversight board in the time period allowed under
a contract, the portion of the unused money provided by the state shall
MUST
be returned to the small business recovery AND RESILIENCY fund.
(6) Distributions or revenue paid to the state pursuant to a contract
under this section shall MUST be deposited in the small business recovery
AND RESILIENCY fund. except that, if such distributions or revenue are paid
after the small business recovery fund is repealed, the money shall be paid
to the state treasurer, who shall credit the money to the general fund
(7) The loan program manager shall report on the implementation
of the loan program to the oversight board at least quarterly, within one
month after the end of each calendar quarter, or more often if requested by
the oversight board. The reports
REPORT must include the information
necessary to allow the
OVERSIGHT board to provide the reports required in
section 24-36-204 (12)
SECTION 24-48.5-604 (12), and any additional
information requested by the board.
24-48.5-606. [Formerly 24-36-206] Small business recovery tax
credits - authorization to issue - terms - report. (1) A qualified taxpayer
may purchase small business recovery tax credits from the department in
accordance with this section and may apply the tax credits against its
premium tax liability in accordance with section 24-36-207
SECTION
24-48.5-607.
(2) (a) The department is authorized to issue tax credit certificates
to qualified taxpayers equal to the lesser of a total face value of up to forty
million dollars or total sales proceeds of up to thirty million five hundred
thousand dollars in fiscal year 2020-21.
(b) The department is authorized to issue tax credit certificates to
qualified taxpayers equal to the lesser of a combined total face value of up
PAGE 15-HOUSE BILL 24-1453 to twenty-eight million dollars or combined total sales proceeds of up to
twenty-one million dollars in fiscal years 2021-22 and 2022-23.
(c) The department may contract with an independent third party to
conduct or consult on a bidding process among qualified taxpayers to
purchase the tax credits.
(d) The department shall consult with insurance companies in
advance of issuing any tax credits in accordance with this section.
(3) An insurance company authorized to do business in Colorado
seeking to purchase tax credits must apply to the department in the manner
prescribed by the department.
(4) Using procedures adopted by the department or, if applicable, by
an independent third party, each insurance company that submits an
application shall make a timely and irrevocable offer, contingent only upon
the department's issuance to the insurance company of the tax credit
certificates, to make a specified purchase payment amount to the department
on dates specified by the department. The offer must include all of the
following:
(a) The requested amount of tax credits, which must not be less than
any minimum amount established in procedures by the department or, if
applicable, the independent third party;
(b) The qualified taxpayer's proposed tax credit purchase amount for
each tax credit dollar requested. The minimum proposed tax credit purchase
amount must be either:
(I) The percentage of the requested dollar amount of tax credits that
the department and
OR, if applicable, the independent third party determines
to be consistent with market conditions as of the offer date; or
(II) If no amount is established by the department or
THE
independent third party pursuant to subsection (4)(b)(I) of this section,
seventy-five percent of the requested dollar amount of tax credits; and
(c) Any other information
THAT the department or, if applicable, THE
independent third party requires.
PAGE 16-HOUSE BILL 24-1453 (5) The department shall provide written notice to each insurance
company that submits an application indicating whether or not the insurance
company has been approved as a purchaser of tax credits and, if so, the
amount of tax credits allocated and the date by which payment of the tax
credit sale proceeds must be made.
(6) On receipt of payment of the sale proceeds, the department shall
issue to each qualified taxpayer a tax credit certificate. The tax credit
certificate must state all of the following:
(a) The total amount of premium tax credits that the qualified
taxpayer may claim;
(b) The amount that the qualified taxpayer has paid or agreed to pay
in return for the issuance of the tax credit certificates and the date of the
payment;
(c) The dates on which the tax credits will be available for use by
the qualified taxpayer;
(d) Any penalties or other remedies for noncompliance;
(e) The procedures to be used for transferring or assuming the tax
credits in accordance with subsection (7)(e) of this section or section
24-36-207 (6) SECTION 24-48.5-607 (6), or between affiliates; as defined in
section 10-3-801 (1)
(f) The serial number of the tax credit certificate; and
(g) Any other requirements deemed necessary by the department as
a condition of issuing the tax credit certificate.
(7) (a) The department shall not issue a tax credit certificate to any
qualified taxpayer that fails to provide the tax credit sale proceeds within
the time
SPECIFIED BY the department. specifies
(b) A qualified taxpayer that fails to provide the tax credit sale
proceeds within the time
SPECIFIED BY the department specifies
is subject
to a penalty equal to ten percent of the amount of the purchase price that
remains unpaid. The penalty must be paid to the department within thirty
PAGE 17-HOUSE BILL 24-1453 days after demand.
(c) The department may offer to reallocate the defaulted tax credits
among other qualified taxpayers so that the result after reallocation is the
same as if the initial allocation had been performed without considering the
tax credit allocation to the defaulting qualified taxpayer.
(d) If the reallocation of tax credits under subsection (7)(c) of this
section results in the payment by another qualified taxpayer of the amount
of tax credit sale proceeds not paid by the defaulting qualified taxpayer, the
department may waive the penalty imposed under subsection (7)(b) of this
section.
(e) A qualified taxpayer that fails to pay the tax credit sale proceeds
within the time specified
BY THE DEPARTMENT may avoid the imposition of
the penalty by transferring the allocation of tax credits to a new or existing
qualified taxpayer within thirty days after the due date of the defaulted
installment. Any transferee of an allocation of tax credits of a defaulting
qualified taxpayer under this subsection (7) shall agree to pay the tax credit
sale proceeds within five days after the date of the transfer.
(8) The tax credit sale proceeds provided by a qualifying taxpayer
in return for a tax credit certificate must be deposited in the small business
recovery
AND RESILIENCY fund.
(9) (a) The department shall provide a report to the division of
insurance in the department of regulatory agencies for each fiscal year in
which it issues tax credit certificates pursuant to this part 2
PART 6 within
thirty days after the issuance of the credits. The report must include:
(I) The name and identifying number issued by the national
association of insurance commissioners, or any successor organization, of
each qualified taxpayer to which the department issued a tax credit
certificate;
(II) The total amount of the tax credit allocated to the qualified
taxpayer; and
(III) The serial number of the tax credit certificate issued to the
qualified taxpayer.
PAGE 18-HOUSE BILL 24-1453 (b) The department shall maintain records of each tax credit
certificate issued, transferred, or assumed that are sufficient to allow the
division of insurance in the department of regulatory agencies to verify the
issuance and ownership of the credit.
24-48.5-607. [Formerly 24-36-207] Use of small business recovery
tax credits - carry over. (1) For a tax credit certificate issued in fiscal year
2020-21:
(a) The qualified taxpayer may claim up to fifty percent of the credit
against premium tax liability incurred for a taxable year that begins on or
after January 1, 2025; except that a taxpayer may not reduce its estimated
tax payments in proportion to such credit prior to July 1, 2025; and
(b) The qualified taxpayer may claim the remaining amount of the
credit against premium tax liability incurred for a taxable year that begins
on or after January 1, 2026; except that a taxpayer may not reduce its
estimated tax payments in proportion to such credit prior to July 1, 2026.
(2) For a tax credit certificate issued in fiscal year 2021-22 or fiscal
year 2022-23:
(a) The qualified taxpayer may claim up to fifty percent of the credit
against premium tax liability incurred for a taxable year that begins on or
after January 1, 2023; except that a taxpayer may not reduce its estimated
tax payments in proportion to such credit prior to July 1, 2023; and
(b) The qualified taxpayer may claim the remaining amount of the
credit against premium tax liability incurred for a taxable year that begins
on or after January 1, 2024; except that a taxpayer may not reduce the
taxpayer's estimated tax payments in proportion to such credit prior to July
1, 2024.
(3) (a) The total credit to be applied by a qualified taxpayer in any
one year must not exceed the premium tax liability of the qualified taxpayer
for the taxable year. If the qualified taxpayer cannot use the entire amount
of the tax credit for the taxable year in which the taxpayer is eligible for the
credit, the excess may be carried over to succeeding taxable years and used
as a credit against the premium tax liability of the taxpayer for those taxable
years; except that:
PAGE 19-HOUSE BILL 24-1453 (I) For a credit issued in fiscal year 2020-21, the credit may not be
carried over to any taxable year that begins after December 31, 2031; and
(II) For a credit issued in fiscal year 2021-22 or 2022-23, the credit
may not be carried over to any taxable year that begins after December 31,
2029.
(b) Any amount of the credit that is not timely claimed expires and
is not refundable.
(4) A qualified taxpayer claiming a credit under this part 2
PART 6
shall submit the tax credit certificate with its tax return.
(5) A qualified taxpayer claiming a tax credit under this part 2 shall
PART 6 WILL not be required to pay any additional or retaliatory tax as a
result of claiming the credit.
(6) If a qualified taxpayer holding an unclaimed tax credit is part of
a merger, acquisition, or line of business divestiture transaction, the tax
credit may be transferred to and assumed by the resulting entity if the
resulting entity is an insurance company authorized to do business in
Colorado that has premium tax liability. The qualified taxpayer that
originally purchased the credit and the resulting entity shall notify the
department in writing of the transfer or assumption of the credit in
accordance with procedures adopted by the department. The department
shall provide a copy of the notice to the division of insurance in the
department of regulatory agencies and shall maintain a record of the transfer
or assumption of the tax credit. The transfer or assumption of the tax credit
does not affect the time schedule for claiming the tax credit as provided in
this section.
24-48.5-608. [Formerly 24-36-208] Small business recovery and
resiliency fund. (1) The small business recovery
AND RESILIENCY fund is
hereby created in the state treasury. The fund consists of:
(a) Tax credit sale proceeds received from qualified taxpayers and
deposited in the fund pursuant to section 24-36-205
SECTION 24-48.5-605;
(b) Distributions, revenue, or money returned to the state from a
loan program established pursuant to section 24-36-205 SECTION
PAGE 20-HOUSE BILL 24-1453 24-48.5-605 and deposited in the fund; and
(c) Any other money that the general assembly may appropriate or
transfer to the fund;
AND
(d) ANY GIFTS, GRANTS, DONATIONS, OR FEDERAL FUNDS RECEIVED
PURSUANT TO SUBSECTION
(7) OF THIS SECTION.
(2) The state treasurer shall credit all interest and income derived
from the deposit and investment of money in the small business recovery
AND RESILIENCY fund to the fund.
(3) Money in the fund is continuously appropriated to the
department
OFFICE for the purposes specified in this part 2 PART 6. The
department OFFICE may expend money in the fund to pay for its direct and
indirect costs in implementing and administering this part 2 PART 6.
(4) Beginning in fiscal year 2027-28, the state treasurer shall credit
any unexpended and unencumbered money remaining in the fund at the end
of a fiscal year to the general fund.
(5) The state treasurer shall transfer all unexpended and
unencumbered money in the fund at the end of the fiscal year on June 30,
2037, to the general fund.
(6) This section is repealed, effective July 1, 2037.
(7) THE OFFICE MAY SEEK, ACCEPT, AND EXPEND GIFTS, GRANTS, OR
DONATIONS FROM PRIVATE OR PUBLIC SOURCES FOR THE PURPOSES OF THIS
PART
6. THE OFFICE MAY ACCEPT AND EXPEND ANY FEDERAL MONEY MADE
AVAILABLE FOR ANY PURPOSE CONSISTENT WITH THE PROVISIONS OF THIS
PART
6. THE OFFICE SHALL TRANSMIT ALL MONEY RECEIVED THROUGH GIFTS ,
GRANTS, DONATIONS, OR FEDERAL MONEY TO THE STATE TREASURER , WHO
SHALL CREDIT THE MONEY TO THE SMALL BUSINESS RECOVERY AND
RESILIENCY FUND
.
24-48.5-609. Transfer of functions - continuity of existence.
(1) O
N SEPTEMBER 1, 2024, THE POWERS, DUTIES, AND FUNCTIONS OF THE
DEPARTMENT IN CONNECTION WITH THE SMALL BUSINESS RECOVERY AND
RESILIENCY LOAN PROGRAM PURSUANT TO THE FORMER PART
2 OF ARTICLE
PAGE 21-HOUSE BILL 24-1453 36 OF THIS TITLE 24 ARE TRANSFERRED TO THE OFFICE PURSUANT TO THIS
SECTION
.
(2) (a) O
N AND AFTER SEPTEMBER 1, 2024, THE OFFICERS AND
EMPLOYEES OF THE DEPARTMENT WHOSE POWERS
, DUTIES, AND FUNCTIONS
CONCERN THE SMALL BUSINESS RECOVERY AND RESILIENCY L OAN PROGRAM
AND WHOSE EMPLOYMENT IS DEEMED NECESSARY TO CARRY OUT THE SMALL
BUSINESS RECOVERY AND RESILIENCY LOAN PROGRAM ARE TRANSFERRED TO
THE DIVISION OF BUSINESS FUNDING AND INCENTIVES WITHIN THE OFFICE
AND BECOME EMPLOYEES THEREOF
.
(b) A
NY EMPLOYEES WHO ARE TRANSFERRED TO THE OFFICE
PURSUANT TO THIS SUBSECTION
(2) AND WHO ARE CLASSIFIED EMPLOYEES
IN THE STATE PERSONNEL SYSTEM SHALL RETAIN ALL RIGHTS TO THE
PERSONNEL SYSTEM AND RETIREMENT BENEFITS PURSUANT TO THE LAWS OF
THE STATE
, AND THEIR SERVICES SHALL BE DEEMED TO HAVE BEEN
CONTINUOUS
. ALL TRANSFERS AND ANY ABOLISHMENT OF POSITIONS IN THE
STATE PERSONNEL SYSTEM SHALL BE MADE AND PROCESSED IN ACCOR DANCE
WITH STATE PERSONNEL SYSTEM LAWS AND REGULATIONS
.
(3) O
N OR BEFORE SEPTEMBER 1, 2024, ALL ITEMS OF PROPERTY,
REAL AND PERSONAL, INCLUDING OFFICE FURNITURE AND FIXTURES, BOOKS,
DOCUMENTS, AND RECORDS OF THE DEPARTMENT PERTAINING TO THE
POWERS
, DUTIES, AND FUNCTIONS TRANSFERRED TO THE OFFICE ARE
TRANSFERRED TO AND BECOME THE PROPERTY OF THE OFFICE
.
(4) W
HENEVER THE DEPARTMENT OR THE STATE TREASURER IS
REFERRED TO OR DESIGNATED BY A CONTRACT OR OTHER DOCUMENT IN
CONNECTION WITH THE POWERS
, DUTIES, AND FUNCTIONS TRANSFERRED TO
THE OFFICE PURSUANT TO THIS SECTION
, SUCH REFERENCE OR DESIGNATION
WILL BE DEEMED TO APPLY TO THE OFFICE
, AS APPLICABLE. ALL CONTRACTS
ENTERED INTO BY THE DEPARTMENT OR THE STATE TREASURER PRIOR TO
SEPTEMBER 1, 2024, IN CONNECTION WITH THE SMALL BUSINESS RECOVERY
AND RESILIENCY LOAN PROGRAM ARE HEREBY VALIDATED
, WITH THE OFFICE
SUCCEEDING TO ALL THE RIGHTS AND OBLIGATIONS OF SUCH CONTRACTS
.
A
NY APPROPRIATIONS OF MONEY FROM PRIOR FISCAL YEARS OPEN TO
SATISFY OBLIGATIONS INCURRED PURSUANT TO SUCH CONTRACTS ARE
TRANSFERRED AND APPROPRIATED TO THE OFFICE FOR THE PAYMENT OF
SUCH OBLIGATIONS
.
PAGE 22-HOUSE BILL 24-1453 (5) ALL POLICIES AND GUIDELINES OF THE DEPARTMENT IN
CONNECTION WITH THE POWERS
, DUTIES, AND FUNCTIONS TRANSFERRED TO
THE OFFICE PURSUANT TO THIS SECTION CONTINUE TO BE EFFECTIVE UNTIL
REVISED
, AMENDED, REPEALED, OR NULLIFIED PURSUANT TO LAW.
(6) T
HE RELOCATION OF THE CLIMBER ACT FROM THE
DEPARTMENT TO THE OFFICE PURSUANT TO THIS PART
6 DOES NOT AFFECT
THE VALIDITY OF ANY AGREEMENTS ENTERED INTO BY OR TAX CREDIT
CERTIFICATES ISSUED BY THE STATE TREASURER OR THE DEPARTMENT
PURSUANT TO THE AUTHORITY CONTAINED IN PART
2 OF ARTICLE 36 OF TITLE
24 AS IT EXISTED PRIOR TO SEPTEMBER 1, 2024.
SECTION 2. Repeal of provisions being relocated in this act. In
Colorado Revised Statutes, repeal 24-36-201, 24-36-202, 24-36-203,
24-36-204, 24-36-205, 24-36-206, 24-36-207, and 24-36-208.
SECTION 3. Repeal of provisions not being relocated in this act.
In Colorado Revised Statutes, repeal 24-36-209 and 24-36-210 as follows:
24-36-209. Office of economic development. The office of
economic development shall assist the state treasurer and the department in
implementing this part 2.
24-36-210. Repeal of part. This part 2 is repealed, effective
December 31, 2040.
SECTION 4. In Colorado Revised Statutes, 24-75-402, amend
(5)(qq) as follows:
24-75-402. Cash funds - limit on uncommitted reserves -
reduction in the amount of fees - exclusions - definitions - repeal.
(5) Notwithstanding any provision of this section to the contrary, the
following cash funds are excluded from the limitations specified in this
section:
(qq) The small business recovery
AND RESILIENCY fund created in
section 24-36-208
SECTION 24-48.5-608;
SECTION 5. Effective date. This act takes effect on September 1,
2024.
PAGE 23-HOUSE BILL 24-1453 SECTION 6. Safety clause. The general assembly finds,
determines, and declares that this act is necessary for the immediate
preservation of the public peace, health, or safety or for appropriations for
the support and maintenance of the departments of the state and state
institutions.
____________________________ ____________________________
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 24-HOUSE BILL 24-1453