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April 29, 2024 SB 24-226
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0532
Sen. Fenberg
Date:
Bill Status:
Fiscal Analyst:
April 29, 2024
Senate Finance
Louis Pino | 303-866-3556
louis.pino@coleg.gov
Bill Topic: MOD TO COLLEGE KICKSTARTER ACCOUNT PROGRAM
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☒ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill expands who may open a college kickstarter account, lengthens the period an
eligible child may be claimed for funding, and expands the advisory board. It increases
state revenue to the College Kickstarter Master Account and decreases state revenue
from income taxes beginning in the current FY 2023-24.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under SB 24-226
Current Year
FY 2023-24
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue* General Fund ($42,000) ($91,000) ($104,000)
College Kickstarter Master Account - $36,000 $41,000
Total ($42,000) ($55,000) ($63,000)
Expenditures
- - -
Transfers College Kickstarter Master Account - ($36,000) ($41,000)
CollegeInvest 529 Accounts - $36,000 $41,000
Total $0 $0 $0
Other Budget
Impacts
TABOR Refund ($42,000) ($91,000) ($104,000)
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April 29, 2024 SB 24-226
Summary of Legislation
The bill expands who may open a College Kickstarter Account to any individual who provides a
birth certificate number or order of adoption for an eligible child; however, funding for an
eligible child can be claimed only once. The bill also lengthens the period for which kickstarter
funding may be claimed for an eligible child from within five years of the child’s birth or
adoption to eight years. Finally, the bill expands the membership of the Kickstarter Program
Advisory Board and makes changes to certain reporting requirements for the program.
Background
House Bill 19-1280 created the College Kickstarter Program in CollegeInvest, a state
enterprise within the Department of Higher Education (DHE). The bill provided initial funding in
a parent- or guardian-owned CollegeInvest account for the benefit of every child born or
adopted in the State of Colorado on or after January 1, 2020. Adoption of any age child and
military residence is also honored. In 2020, the kickstarter funding amount was $100 per eligible
child, adjusted each year by inflation in the Denver-Aurora-Lakewood consumer price index. In
2024, the amount is equal to $115 per child. The parents or guardians have until the child’s
fifth birthday to claim the award.
House Bill 19-1280 directs CollegeInvest to deposit funds in the Kickstarter Master Account for
each eligible child each fiscal year through FY 2044-45. The amounts to be deposited must be
sufficient to pay for kickstarter funding transfers to private 529 college savings accounts. These
funds are to be taken from CollegeInvest funds that would otherwise be available for
scholarships via the Colorado CollegeInvest Scholarship Program, or for grants via the
CollegeInvest Matching Grant Program. CollegeInvest is directed to increase available revenue
and may not reduce existing levels of scholarship or matching grant funding. CollegeInvest is
required to designate kickstarter funding in the master account for each child.
The Department of Public Health and Environment is required to furnish monthly reports to
CollegeInvest providing the name of every child born or adopted in Colorado during the prior
month, and the date and location of each child's birth or adoption.
On October 5, 2021, CollegeInvest announced it would match contributions for those that open
a kickstarter account up to $1,000 per year for 5 years. This program is beyond the $100
kickstarter funds required under House Bill 19-1280. This additional incentive is funded through
federal dollars and does not use state taxpayer funds, administrative fees, or funds for the
College Kickstarter Program.
Assumptions
The 2024 CollegeInvest Kickstarter Report shows, on average, about 3,000 new accounts have
been opened and claimed funding each year since 2020. For tax year 2024, the fiscal note
assumes the bill will cause an increase of about 10 percent in new accounts (300) created and Page 3
April 29, 2024 SB 24-226
receiving funding annually as a result of expanding who may open an account, lengthening the
period an eligible child may be claimed for kickstarter funding, and additional incentives from
matched contributions. This amount is expected to gradually continue to increase over future
years as more taxpayers become aware of the program and the additional incentives.
The report shows, of these new accounts, about 3,000 additional contributions were made, with
an average contribution of $3,292 per account. The fiscal note assumes for each new account
created as a result of this bill about two additional contributions will be made, with an average
contribution of $3,500 per account over the next several years.
State Revenue
On net, the bill is expected to decrease state revenue by $42,000 in the current FY 2023-24
(a half-year impact), by $55,000 in FY 2024-25, by $63,000 in FY 2025-26, and by slightly higher
amounts grown by inflation and the state birth rate in subsequent years. Revenue impacts are
explained below.
Kickstarter Program Master Account. CollegeInvest is authorized to seek increased revenue
for deposit in the Kickstarter Program Master Account, such that sufficient deposits can be made
in the Kickstarter Program Master Account without reducing current levels of funding available
for scholarships and grants. CollegeInvest is expected to seek revenue sufficient to offset
kickstarter funding claimed, estimated to be $36,000 in FY 2024-25, $41,000 in FY 2025-26, and
growing by inflation and the state birth rate in subsequent years.
Income taxes. The bill increases revenue to private 529 accounts managed by CollegeInvest to
the extent that it incentivizes taxpayers who would not otherwise contribute to these accounts
to do so. These contributions are omitted from Table 1 because private 529 accounts fall
outside the state budget as private accounts for individuals. However, though kickstarter
amounts deposited in a 529 account do not qualify for the state income tax deduction for 529
account contributions, additional contribution amounts to the new account will qualify. For
example, total contributions by a taxpayer in the amount of $3,300 will qualify for an income tax
deduction equal to this amount, reducing the contributor’s state income tax liability by about
$145 based on the 4.40 percent state income tax rate.
General Fund revenue is expected to decrease by $42,000 in the current FY 2023-24 (half-year
impact), $91,000 in FY 2024-25, $104,000 in FY 2025-26, and slightly larger amounts in
subsequent years because of inflation and the state birth rate. Income tax revenue is subject to
TABOR.
Gifts, grants, and donations. The bill potentially increases state revenue from gifts, grants, and
donations. Gifts, grants, and donations are exempt from the TABOR limit and may be expended
without appropriation by the General Assembly.
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April 29, 2024 SB 24-226
State Transfers
The bill is expected to increase transfers within CollegeInvest, from the College Kickstarter
Master Account to private 529 accounts, by $36,000 in FY 2024-25 and by $41,000 in
FY 2025-26, grown by inflation and the state birth rate in subsequent years.
To the extent that CollegeInvest is unable to raise sufficient gifts, grants, and donations to
support the kickstarter program, it is assumed that transfers from the Colorado CollegeInvest
Scholarship Trust Fund to the College Kickstarter Master Account would increase
correspondingly.
State Expenditures
The bill minimally increases the workload for CollegeInvest and the Department of Revenue. It is
assumed that this workload increase can be accomplished within existing appropriations.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
State and Local Government Contacts
Higher Education Information Technology Law
Public Health and Environment 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.