Taxation - Digest of Bills

Digest of Bills - 2005

TAXATION

S.B. 05-52 Income tax - voluntary contribution program for military family relief - creation of fund - appropriation. Creates the military family relief fund (fund) in the state treasury. Authorizes the adjutant general of the state to accept gifts, grants, and donations to the fund. States that the fund shall consist of such gifts, grants, and donations and contributions from the military family relief voluntary contribution that appears on the state income tax form.

Directs the adjutant general to transfer any gifts, grants, or donations to the fund to the state treasurer who shall credit the same to the fund. States that all moneys remaining in the fund at the end of a fiscal year shall be transferred to the Colorado national guard foundation (foundation), a Colorado nonprofit organization.

Directs the foundation to use the moneys from the fund to make grants to national guard members or reservists or to the families of national guard members or reservists. Directs the foundation to establish criteria for awarding grants. Specifies certain requirements that a national guard member or reservist shall meet to be qualified to receive a grant. States that the department of veterans and military affairs shall have the authority to oversee the grants issued by the foundation.

In the event that the military family relief voluntary contribution program is not continued or reestablished, allows the foundation to donate moneys remaining in the fund to the western slope military veterans' cemetery fund.

For income tax years commencing on or after January 1, 2005, but prior to January 1, 2008, requires that a voluntary contribution designation line for the fund appear on individual income tax return forms.

Directs the department of revenue to determine annually the total amount designated to the fund and to report such amount to the state treasurer, to the adjutant general, and to the committees of the senate and the house of representatives that address veterans and military affairs issues. Directs the state treasurer to credit such amount to the fund.

Requires the general assembly to appropriate annually from the fund to the department of revenue its costs of administering moneys designated as contributions to the fund.

APPROVED by Governor May 27, 2005
EFFECTIVE May 27, 2005

S.B. 05-56 Property tax appeal - sustained appeal - notice requirements prior to receipt of refund. Establishes that the appellant in a sustained property tax appeal shall provide a copy of the order or judgment of the board of assessment appeals or district court to the county assessor. If the order or judgment has been appealed, the appellant shall present to the county assessor a copy of the original order or judgment of the board of assessment appeals or district court and copies of all further decisions of the board of assessment appeals, district court, court of appeals, and supreme court.

Upon presentation to the treasurer by the county assessor of a copy of the order or judgment of the board of assessment appeals or district court and, in the event of an appeal, any further decisions of the board of assessment appeals, district court, court of appeals, or supreme court, the treasurer shall pay to the appellant, if the appellant is identified as the petitioner or plaintiff on the order or judgment, the appropriate refund of taxes, delinquent interest, refund interest, costs, and witness fees.

APPROVED by Governor April 5, 2005
EFFECTIVE April 5, 2005

S.B. 05-105 Taxation - property tax - alternate protest and appeal procedure. Modifies the alternative protest and appeal procedure that currently allows certain large counties additional time to determine objections and protests regarding the valuation, taxable status, or ownership of property so that the objections or protests are subject to the same deadlines regardless of whether the property at issue is real or personal. Authorizes all counties to elect to use the alternative protest and appeal procedure.

APPROVED by Governor April 27, 2005
EFFECTIVE April 27, 2005

S.B. 05-154 Property tax - county treasurer - installment or full payments. Clarifies that the property tax payment received by the county treasurer must be the installment or full payment, including any penalties or fees due.

APPROVED by Governor April 14, 2005
EFFECTIVE April 14, 2005

S.B. 05-201 Severance tax trust fund - use of moneys for LEAP program - appropriation. Authorizes the appropriation of moneys from the operational account of the severance tax trust fund to increase funding for the low-income energy assistance program of the department of human services and appropriates $7,600,000 from the account for such purpose.

APPROVED by Governor May 5, 2005
EFFECTIVE May 5, 2005

S.B. 05-222 Gasoline and special fuel tax - tax imposed - tax collection - reporting. Reorganizes existing law so that both special fuel and gasoline shall be taxed by the gallon and will each be provided the same allowances for losses in transit and costs of collection.

Requires electronic funds transfers for gasoline and special fuel tax remittances and changes the due date for such remittances. Changes the due dates for filing of reports. Repeals obsolete provisions in the statute.

APPROVED by Governor June 1, 2005
EFFECTIVE July 1, 2005

S.B. 05-232 Homestead property tax deferral program - subordination agreements - delayed repayment of loans for deferred real property taxes. Eliminates the requirement that a property may not be eligible for the homestead property tax deferral program (program) unless there are no liens of a mortgage or deed of trust that have been of record for less than 5 years, or, if there are such liens, there is a subordination agreement with the holder of the mortgage or deed of trust. On or after January 1, 2006, establishes that a property shall not be eligible for the program unless either of the following applies to the property:

● The owner of the property is a person who is 65 years of age or older, and the total value of all liens of mortgages and deeds of trust on the property, excluding any mortgage or deed of trust that the holder has agreed, on a form designated by the state treasurer, to subordinate to the lien of the state for deferred taxes, is less than or equal to 75% of the actual value of the property, as determined by the county assessor.

● The owner of the property is a person called into military service, and the total value of all liens of mortgages and deeds of trust on the property, excluding any mortgage or deed of trust that the holder has agreed, on a form designated by the state treasurer, to subordinate to the lien of the state for deferred taxes, is less than or equal to 90% of the actual value of the property, as determined by the county assessor.

Establishes that a loan for deferred real property taxes, including accrued interest, of a taxpayer who was a person called into military service shall not become payable upon the death of the taxpayer if the property is the homestead of the surviving spouse of the taxpayer and the property meets other statutory requirements.

APPROVED by Governor June 1, 2005
EFFECTIVE June 1, 2005

H.B. 05-1051 Income tax - voluntary contribution for Colorado watershed protection fund. Extends the period that state income tax return forms shall include a line whereby individual taxpayers may make a voluntary contribution to the Colorado watershed protection fund.

APPROVED by Governor June 1, 2005
EFFECTIVE June 1, 2005

H.B. 05-1053 Income tax - voluntary contribution for military family relief - expand to include active duty military. Expands the voluntary contribution program for military family relief by allowing active duty military members stationed in Colorado, and the families of active duty military members stationed in Colorado, to be eligible to receive grants from the military family relief fund.

Directs the Air Force society and army emergency relief to work in cooperation to develop criteria for awarding grants to active duty military members, subject to certain eligibility requirements.

Specifies that each active duty military member or the family of an active duty military member may apply to the Air Force aid society or Army emergency relief, as appropriate, for one grant per deployment to a zone in which the active duty military member qualifies to receive hostile fire pay or the equivalent. Specifies that if the Air Force society or Army emergency relief determine that an active duty military member or the family of an active duty military member is eligible to receive a grant, the Air Force society or Army emergency relief shall notify the Colorado National Guard foundation. States that upon receipt of notification, the foundation shall issue the grant. Specifies that moneys from the fund shall be awarded for grants on a first-come, first-served basis.

States that the act is contingent on the passage of Senate Bill 05-52.

APPROVED by Governor May 27, 2005
EFFECTIVE May 27, 2005
NOTE: Senate Bill 05-052 was signed by the governor May 27, 2005.

H.B. 05-1056 Income tax - voluntary contribution for Alzheimer's association - administration of moneys - appropriation. Creates the Alzheimer's association fund in the state treasury. Requires that for income tax years commencing on or after January 1, 2005, but before January 1, 2008, a voluntary contribution designation line for the fund shall appear on individual income tax return forms.

Directs the department of revenue to determine annually the total amount designated to the Alzheimer's association fund and to report such amount to the state treasurer and the general assembly. Directs the state treasurer to credit such amount to the fund.

Requires the general assembly to appropriate annually from the Alzheimer's association fund to the department of revenue its costs of administering moneys designated as contributions to the fund. States that all moneys remaining in the fund at the end of a fiscal year shall be transferred to the Alzheimer's association Colorado chapter for the association to administer in furtherance of the association's work in providing family support services and caregiver education.

Makes an appropriation of $350 from the Alzheimer's association fund to the department of revenue.

APPROVED by Governor May 12, 2005
EFFECTIVE May 12, 2005

H.B. 05-1125 Charitable contribution deduction - changes to TABOR refund mechanism. For income tax years commencing on or after January 1, 2006, reduces the amount of excess state revenues necessary to trigger the method of refunding portions of the excess state revenues required to be refunded in accordance with the state constitution that provides nonitemizing state income taxpayers a charitable contribution deduction.

Establishes that if voters approve, by a simple majority, at the November 2005 statewide election, a revenue change pursuant to the state constitution, or otherwise modify the provisions of the state constitution in a manner that provides additional revenue for expenditure by the state, then no excess state revenues are necessary for the charitable contribution deduction to apply.

States that if such revenue change or modification approved by the voters is for a limited time, at the end of that period the state income tax modification shall be allowed when the excess state revenues are at the level established commencing income tax year January 1, 2006.

BECAME LAW April 8, 2005
EFFECTIVE April 8, 2005

H.B. 05-1189 Income tax - voluntary contribution for Colorado CASA - name change. Changes the name of the court-appointed special advocates (CASA) fund to Colorado CASA - a voice for abused and neglected children fund.

Extends the period that state income tax return forms shall include a line whereby individual taxpayers may make a voluntary contribution to the Colorado CASA - a voice for abused and neglected children fund.

APPROVED by Governor June 2, 2005
EFFECTIVE June 2, 2005

H.B. 05-1221 Cigarette wholesalers and wholesale subcontractors - tobacco product distributors and distributing subcontractors - license requirements. Prohibits a wholesaler from being issued a new or renewed license to sell or offer to sell cigarettes in this state unless the wholesaler:

● Does not owe the state any delinquent taxes administered by the department of revenue (department), which is an increase over the current requirement that the wholesaler not be delinquent with respect to a list of specified taxes;

● Has a current sales tax license;

● Has purchased or will purchase cigarettes from at least one manufacturer that is either part of the master settlement agreement or places funds into a qualified escrow account; and

● Files a surety bond issued by a company authorized to do business in this state with the department.

Reduces the amount of the surety bond for each consecutive preceding year the wholesaler has not been delinquent in the payment of the cigarette tax. Requires a wholesaler to pay cash or certified funds for any cigarette tax stamps that exceed the amount of the wholesaler's anticipated monthly purchases of stamps.

Prohibits a distributor from being issued a new or renewed license to sell or offer to sell tobacco products in this state unless the distributor:

● Does not owe the state delinquent taxes administered by the department; and

● Has a current sales tax license.

Requires the department to revoke a wholesaler's or distributor's license if the wholesaler or distributor owes the state any delinquent taxes administered by the department.

Creates a new license for a person who is a wholesale subcontractor or a distributing subcontractor. Establishes requirements to obtain or renew such licenses.

APPROVED by Governor June 1, 2005
EFFECTIVE June 1, 2005

H.B. 05-1244 Income tax - conservation easement credit. Authorizes the executive director of the department of revenue to require additional information from taxpayers and transferees claiming an income tax credit for the donation of a perpetual conservation easement (credit). Authorizes the executive director, for good cause shown, to review and accept or reject the appraisal value of the easement, the amount of the credit, and the validity of the credit based upon the internal revenue code and federal regulations in effect at the time of the donation.

If a taxpayer transfers a credit to a transferee, requires the transferee to purchase the credit prior to the deadline for filing the transferee's income tax return. Provides that a credit shall survive the death of an individual and may be claimed or transferred by the individual's estate in specified circumstances.

Specifies that the donor of a conservation easement or the transferor of the credit shall be the tax matters representative with respect to the credit. Specifies the responsibilities of the tax matters representative. Provides that final resolution of disputes regarding a credit between the department of revenue and the tax matters representative shall be binding on the transferees.

APPROVED by Governor June 7, 2005
EFFECTIVE June 7, 2005

H.B. 05-1251 Publicly traded partnerships - nonresident partners - composite returns and payments. States that a publicly traded partnership may not file a composite income tax return or make composite tax payments on behalf of its nonresident partners.

Exempts a publicly traded partnership from the requirement either to file with the department of revenue an agreement by each nonresident to pay the income tax on the nonresident partner's share of income attributable to this state or to pay the income tax on behalf of each nonresident partner.

APPROVED by Governor April 7, 2005
EFFECTIVE August 8, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1262 Tobacco tax - implementation - distribution - appropriation. Creates in the state treasury the tobacco tax cash fund ("cash fund"). Specifies that the cash fund shall consist of moneys collected from the cigarette and tobacco taxes imposed pursuant to section 21 of article X of the state constitution ("tobacco tax"). Requires 3% of the moneys annually collected to be allocated as follows:

20% of the moneys:

● For fiscal years 2004-05 and 2005-06 to the state's general fund for health-related purposes; and

● For fiscal year 2006-07 and each fiscal year thereafter, 50% to provide immunizations performed by county public health nursing services and 50% to augment hospital reimbursement rates under the state's medicaid program for regional pediatric trauma centers.

50% of the moneys:

● Beginning in fiscal year 2004-05 to the supplemental old age pension health and medical care program.

30% of the moneys:

● Beginning in fiscal year 2004-05 to municipal and county governments.

Prohibits tobacco tax from being utilized for the purposes of lobbying or to support or oppose any ballot issue or ballot question.

Makes the necessary statutory changes for the department of revenue to levy and collect the tobacco tax. Requires the wholesalers and distributors to electronically remit tobacco tax payments to the department of revenue. Authorizes the department of revenue to require wholesalers and distributors to file tax returns electronically.

Establishes separate funds for the allocation of the moneys collected as tobacco tax, as follows: 46% of the moneys to the health care expansion fund; 19% to the primary care fund; 16% to the tobacco education programs fund; and 16% to the prevention, early detection, and treatment fund. Requires that the tobacco tax moneys collected and the interest earned on those moneys be used for specified purposes.

Health care expansion fund

● To increase eligibility in the children's basic health plan for children and pregnant women from 185% to 200% of the federal poverty level;

● To remove the asset test under the medical assistance program for children and families;

● To expand the number of children that can be enrolled in specified children's home- and community-based service waiver programs;

● To increase eligibility in the medical assistance program to at least 60% of the federal poverty level for a parent of a child who is eligible for the medical assistance program or the children's basic health plan;

● To fund medical assistance to specified legal immigrants;

● To pay for enrollment increases above the average enrollment for state fiscal year 2003-04 in the children's basic health plan;

● To provide $540,000 annually for cost-effective marketing to increase the enrollment of eligible children and pregnant women in the children's basic health plan; and

● To provide presumptive eligibility to pregnant women under the medical assistance program.

Reserve:

Specifies that all fiscal year 2004-05 revenues transferred to the health care expansion fund ("fund") minus specified administrative costs shall remain in the fund as a reserve. Beginning in fiscal year 2005-06, specifies that 10% of moneys annually allocated to the fund and any unencumbered and unexpended moneys at the end of any fiscal year shall remain in the fund and be added to the reserve until the reserve balance is equal to the amount annually transferred to the fund. Specifies how much of and under what circumstances the moneys in the reserve may be expended.

Primary care fund

● Annually allocates all moneys to eligible qualified providers, who comply with specified reporting requirements, based on the number of uninsured or medically indigent patients served by the provider in proportion to the total number of uninsured or medically indigent patients served by all eligible qualified providers in the previous calendar year.

Tobacco education programs fund

● Allows for the interest earned on the tobacco education programs fund to be used to give credit to wholesalers and distributors for taxes paid on cigarettes and other tobacco products that are bad debts.

● Annually appropriates moneys in the tobacco education programs fund to the tobacco education, prevention, and cessation grant program ("grant program").

● Annually appropriates up to $350,000 to the division of liquor enforcement for the purposes of enforcing laws related to the sale of tobacco to minors.

Makes modifications to the current grant program, including allowing an entity to apply for a grant under the program for the purpose of evaluating the entire statewide program or individual components of the program. Requires that:

● At least 15% of the grant moneys shall be annually awarded to grantees for the purposes of providing funding to eliminate health disparities among minority populations and high-risk populations.

● The majority of the moneys awarded under the grant program shall be for programs that prevent and reduce tobacco use among youth and young adults.

● Up to 15% of the moneys annually awarded through the grant program shall be to grantees of the Tony Grampsas youth services program.

Establishes the 16-member tobacco prevention and control program review committee to ensure that program priorities are established consistent with the Colorado tobacco prevention and control strategic plan, to oversee program strategies and activities, and to oversee the program.

Prevention, early detection, and treatment fund

● Annually allocates up to $5 million for breast and cervical cancer screenings and treatment.

● Annually allocates 15% of the amount remaining for a newly created health disparities grant program to provide financial support for statewide initiatives that address prevention, early detection, and treatment of cancer and cardiovascular and pulmonary diseases in underrepresented populations.

● For fiscal years 2005-06 and 2006-07, allocates $2 million for medicaid disease management programs that address cancer, heart disease, and lung disease.

● Allocates the moneys remaining in this fund to the cancer, cardiovascular disease, and chronic pulmonary disease prevention, early detection, and treatment program, which is a newly created competitive grant program that provides funding for programs and initiatives that provide evidence-based education and intervention strategies for cancer, cardiovascular disease, and chronic pulmonary disease prevention, early detection, and treatment.

Establishes a 16-member review committee to oversee the competitive grant program. Requires a minimum of 10% of the moneys annually awarded to be directed to projects impacting rural areas as part of the Governor's rural healthcare initiative.

Makes various adjustments to the 2004 and 2005 general appropriation acts to implement the act.

Provides that provisions of the act are contingent on the passage of House Bill 05-1261.

APPROVED by Governor June 2, 2005
PORTIONS EFFECTIVE June 2, 2005
PORTIONS EFFECTIVE January 1, 2006
NOTE: House Bill 05-1261 was signed by the governor June 2, 2005.

H.B. 05-1275 Redevelopment of contaminated land income tax credit - extension. Extends the income tax credit for redevelopment of contaminated land.

Extends the automatic repeal date from December 31, 2010, to December 31, 2015.

APPROVED by Governor June 7, 2005
EFFECTIVE June 7, 2005

H.B. 05-1289 Property tax - residential property - ratio of valuation for assessment. Sets the ratio of valuation for assessment for residential real property for the 2005 and 2006 property tax years at 7.96% of actual value.

APPROVED by Governor May 27, 2005
EFFECTIVE May 27, 2005

H.B. 05-1290 Income tax credits - vehicles using alternative fuels. Maintains the amounts of the tax credits for the purchase of vehicles using alternative fuels, which would otherwise be reduced in the year 2006, until the year 2009, and extends the tax credits, which would otherwise expire in the year 2009, to the year 2011, as follows:

	Tax years commencing on or after July 1, 1998, but prior to January 1, 2007	Tax years commencing on or after January 1, 2007, but prior to January 1, 2010	Tax years commencing on or after January 1, 2010, but prior to January 1, 2012
Vehicle certification level	Amount of tax credit, as a percentage of the difference in cost between a traditional-fuel and alternative-fuel vehicle
Low-emitting vehicle	50%	50%	25%
Ultra-low-emitting vehicle or inherently low-emitting vehicle	75%	75%	50%
Zero-emitting vehicle	85%	85%	75%

APPROVED by Governor June 1, 2005
EFFECTIVE August 8, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1299 Income tax - voluntary contribution programs - modification of limitations - hearings - minimum amount collected - maximum number of programs. Eliminates the provision that directs a committee of reference in each house of the general assembly to hold a hearing prior to the termination, continuation, or reestablishment of a voluntary contribution program.

Reduces to $75,000 the minimum amount that each voluntary contribution program is required to receive for each income tax year that the voluntary contribution program appears on the state income tax return form in order to remain on the form in the following income tax year.

Expands to 15 the maximum number of voluntary contribution programs that are allowed to appear on the state income tax return form for any income tax year.

APPROVED by Governor June 1, 2005
EFFECTIVE August 8, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1314 Income tax - tax credit for aircraft manufacturers that employ new employees. Allows any airport in the state to register with the Colorado office of economic development (office) to become an aviation development zone.

For income tax years commencing on or after January 1, 2006, but before January 1, 2017, allows any aircraft manufacturer that is located in an aviation development zone, that employs at least 10 full-time employees within the zone, and that hires one or more new employees during the income tax year an income tax credit in an amount equal to $1,200 for each new employee working within the zone, prorated according to the number of months the new employee was employed by the aircraft manufacturer during the income tax year. Specifies that the credit shall be allowed for a maximum of 12 consecutive months for each new employee employed by an aircraft manufacturer.

Specifies the method by which the total number of new employees hired during an income tax year shall be calculated for an aircraft manufacturer that is not located in the state or in an aviation development zone prior to January 1, 2006. Specifies the method by which the total number of new employees hired during an income tax year shall be calculated for an aircraft manufacturer that already operates a facility in an aviation development zone on January 1, 2006, or that opens a facility in an aviation development zone to replace another facility in or outside of an aviation development zone at which the aircraft manufacturer discontinued operations before the close of the first income tax year in which the income tax credit is allowed.

States that the amount of the income tax credit not used as on offset against income taxes in the income tax year for which the credit is claimed shall not be allowed as a refund but may be carried forward as a credit against subsequent years' tax liability.

Directs the executive director of the department of revenue to promulgate rules necessary to administer the income tax credit.

Requires any aircraft manufacturer that claims an income tax credit for one or more new employees to submit an annual progress report including specified information to the office and the department of revenue. Directs the office to include the information from aircraft manufacturers in an annual report to the general assembly.

APPROVED by Governor June 8, 2005
EFFECTIVE August 8, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1317 Income tax - temporary rate reduction - refund of state revenues in excess of the limitation of state fiscal year spending. For any state fiscal year commencing on or after July 1, 2010, requires a temporary reduction of the state income tax rate from 4.63% to 4.5% of federal taxable income to refund a portion of the excess state revenues that are required to be refunded pursuant to the taxpayer's bill of rights as contained in the state constitution (TABOR), if the amount of state revenues in excess of the limitation on state fiscal year spending imposed by TABOR that are required to be refunded for such state fiscal year exceeds the estimated amount by which state revenues would be decreased as the result of such reduction in the state income tax rate. Specifies that the state income tax rate shall be reduced for the income tax year commencing during the calendar year in which the state fiscal year for which there were excess state revenues ended.

Requires the executive director of the department of revenue (executive director) to estimate, by a specified deadline, the amount by which state revenues would be decreased as the result of a reduction in the state income tax rate from 4.63% to 4.5% of federal taxable income.

Specifies that if one or more ballot questions are submitted to the voters at a statewide election held in November of any given calendar year that seek authorization for the state to retain and spend all or any portion of the amount of excess state revenues for the state fiscal year ending during said calendar year, the executive director shall not reduce the state income tax rate unless, after the results of said election, the amount of excess state revenues required to be refunded exceeds the estimated amount by which state revenues would be decreased as a result of a reduction in the state income tax rate from 4.63% to 4.5% of federal taxable income.

Requires the executive director to use the most recent data available from legislative council staff in estimating the amount by which state revenues would be decreased as the result of a reduction in the state income tax rate. Requires the executive director to notify the executive committee of the legislative council of the decrease in state revenues estimated and the basis for such estimate. Directs the executive committee to review and approve or disapprove such estimated amount. Specifies procedures to be followed in the event that the executive committee does not approve of the estimated amount.

Requires an income tax rate adjustment to be made by rules promulgated by the executive director.

Specifies that the state income tax rate reduction shall not take effect if the amount of excess state revenues for a state fiscal year that the state is not authorized to retain and spend is less than the estimated amount by which state revenues would be decreased as the result of a reduction in the state income tax rate.

In state fiscal years when the state income tax rate is authorized to be temporarily reduced as a means of refunding excess state revenues as required by TABOR, specifies that the temporary income tax rate reduction shall be allowed before any other method of refunding excess state revenues specified by law is triggered.

States that the general assembly finds and declares that a temporary state income tax rate reduction is a reasonable method of refunding a portion of the excess state revenues required to be refunded in accordance with TABOR.

States that the act is contingent upon the passage of House Bill 05-1194 and its approval by the voters and proclamation by the governor.

APPROVED by Governor June 6, 2005
EFFECTIVE See note below
NOTE: House Bill 05-1194 was passed by the general assembly and will appear on the ballot at the November 2005 odd-year election. If approved, it will become effective upon proclamation of the governor, which will occur in either December of 2005 or January of 2006.