Taxation - Digest of Bills

Digest of Bills - 2006

TAXATION

S.B. 06-12 Income tax - voluntary contributions for family resource centers fund. Extends the period by 3 years that state income tax return forms shall include a line whereby individual taxpayers may make a voluntary contribution to the family resource centers fund. Provides that the family resource centers association, a Colorado nonprofit organization, will receive and distribute the moneys to family resource centers statewide.

APPROVED by Governor March 31, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

S.B. 06-70 Personal property tax - refund from a lessor of overpayment of moneys paid by a lessee of personal property. If a lessee of personal property is required to make payments to a lessor for personal property taxes on the leased personal property, then the lessor shall account for those payments upon the termination of the lease entered into between the lessee and lessor. The accounting is to be based on the actual property tax due in each year of the lease period. If it is determined upon this accounting that a refund is due to the lessee for overpayment of property taxes, the lessor shall refund to the lessee any payment made in excess of the total taxes levied on or before August 31 of the year in which the tax is due.

Specifies that a lessor is liable to the lessee for treble damages, attorney fees, and costs if the lessor willfully fails to make a refund.

Establishes a 3-year statute of limitations to commence an action for willful failure to make a refund.

APPROVED by Governor April 4, 2006
EFFECTIVE April 4, 2006

S.B. 06-197 Income tax - voluntary contribution to the nongame and endangered wildlife cash fund. Extends the period that state income tax return forms shall include a line whereby individual taxpayers may make a voluntary contribution to the nongame and endangered wildlife cash fund.

APPROVED by Governor May 25, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

S.B. 06-201 Income tax - voluntary contribution to the Colorado domestic abuse program 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 domestic abuse program fund.

APPROVED by Governor May 25, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

S.B. 06-229 Severance tax trust fund - operational account - national deep underground science and engineering laboratory. If the national science foundation awards a national deep underground science and engineering laboratory (DUSEL) to the Henderson mine near Empire and if there are available moneys, requires the general assembly to appropriate $20 million from the operational account of the severance tax trust fund over a 5-year period beginning with the state fiscal year 2007-08 to pay the state's share of the costs related to the construction and operation of a DUSEL facility that will house a visitors' center, educational resources, and administrative offices related to the DUSEL.

APPROVED by Governor May 31, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 06-1019 Income tax - voluntary contribution for Colorado Easter Seals - appropriations. Creates the Colorado Easter Seals fund (fund) in the state treasury. For income tax years commencing on or after January 1, 2006, but before January 1, 2009, requires a voluntary contribution designation line for the fund to appear on individual income tax return forms.

Directs the department of revenue (department) to determine annually the total amount designated to the fund and to report that amount to the state treasurer and the general assembly. Directs the state treasurer to credit that amount to the fund.

Requires the general assembly to appropriate annually from the fund to the department 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 Easter Seals Colorado, a Colorado nonprofit organization, for the organization to administer in furtherance of the organization's work throughout the state.

Makes an appropriation of $350 from the fund to the department of revenue.

APPROVED by Governor May 4, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 06-1094 Personal property - oil and gas leaseholds or lands - notice of valuation sent to operator. Requires a county assessor to send a notice of valuation of taxable personal property on oil and gas leaseholds or lands to the operator rather than the owner if the leaseholds or lands are producing or capable of producing oil or gas. Requires the operator to accept the notice of valuation. States that the acceptance of the notice by the operator shall not be construed as an indication that the operator agrees with the amount of the actual value of the property stated in the notice or as obligating the operator to pay the tax on property in which the operator has no ownership interest. Requires the operator, upon written request of the county treasurer, to submit to the treasurer a written statement listing each person who has an ownership interest in the property. Imposes on an operator who fails to submit the statement within 30 days a penalty of $100 or the amount of tax due on the property, whichever is less.

Makes the act applicable to notices of valuation of oil and gas leaseholds or lands for property tax years commencing on or after January 1, 2006.

APPROVED by Governor March 13, 2006
EFFECTIVE March 13, 2006

H.B. 06-1209 Income tax - voluntary contribution for Special Olympics Colorado fund. Extends the period that state income tax return forms shall include a line whereby individual taxpayers may make a voluntary contribution to the Special Olympics Colorado fund.

APPROVED by Governor May 25, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 06-1275 Property tax - valuation of public utilities - wind energy facilities. Specifies that in the absence of preponderant evidence shown by the property tax administrator (administrator) that the use of the cost approach and market approach results in uniform and just and equal valuation, wind energy facilities first placed in production on or after January 1, 2006, are to be valued based only on the income approach.

Specifies that the actual value of a wind energy facility placed in production on or after January 1, 2006, is at an amount equal to a tax factor times the selling price of energy at the interconnection meter. Requires the tax factor to be established by the administrator as a number that, when applied to the selling price at the interconnection meter, results in approximately the same tax revenue over a 20-year period that would have been collected using the cost basis method of taxation for a renewable energy facility.

Requires the owner or operator of a wind energy facility to provide a copy of the facility's current purchase power agreement. Grants the administrator authority to request the current purchase power agreements from the purchaser of power. Specifies that all purchase power agreements are private documents available only to the administrator and the employees of the division of property taxation.

Specifies that no actual value is assigned to personal property used in a facility until that personal property is first put into use. Specifies that if an item of personal property is taken out of service so that no wind energy is produced from that facility for the preceding calendar year, no actual value shall be assigned to that item of more than 5% of the installed cost of the item for that assessment year.

Makes the act shall applicable to the determination of the actual value of new wind energy facilities first placed in production on or after January 1, 2006.

BECAME LAW May 9, 2006
EFFECTIVE May 9, 2006

H.B. 06-1297 Income tax - voluntary contribution for multiple sclerosis - appropriation. Creates the multiple sclerosis fund (fund) in the state treasury. For income tax years commencing on or after January 1, 2006, but before January 1, 2009, requires a voluntary contribution designation line for the fund to appear on individual income tax return forms.

Requires the general assembly to appropriate annually from the fund to the department 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 national multiple sclerosis society, Colorado chapter, a Colorado nonprofit organization, for the organization to administer in furtherance of the organization's work throughout the state.

Makes an appropriation of $350 from the fund to the department of revenue.

APPROVED by Governor May 4, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 06-1354 Income tax - conservation easement. Modifies the amount of the fair market value of a conservation easement in gross donated on or after January 1, 2007, to a governmental entity or a charitable organization that may be claimed under the existing state income tax credit for conservation easements. Allows 50% of the fair market value of the conservation easement to be claimed rather than 100% of the first $100,000 of the fair market value and 40% of all amounts of the fair market value in excess of $100,000. Increases the maximum amount of the credit that may be claimed from $260,000 to $375,000. In the case of a joint tenancy or tenancy in common, specifies that the credit shall be allocated to the owners of the property.

APPROVED by Governor May 1, 2006
EFFECTIVE August 7, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 06-1398 Allocation of state sales and use tax revenues - clarification. Repeals and reenacts the existing statutory provision that allocates 85% of the net revenue of the state sales and use tax to the old age pension fund and governs the diversion of the remaining 15% of the net revenue of the state sales and use tax to the highway users tax fund (HUTF), the general fund, the older Coloradans cash fund, and the supplemental old age pension health and medical care fund (diversion) in order to reestablish the existing statutory allocation and diversion of the net revenue in a more consolidated and straightforward manner, eliminate obsolete provisions, and clarify the manner in which the diversion is to be administered. With respect to the administration of the diversion:

● Creates a sales and use tax holding fund (holding fund) and requires 10.355% of the net revenues of the state sales and use tax that currently are credited directly to the HUTF unless there is a forecasted shortfall in general fund revenues to be credited to the holding fund.

● Generally requires all moneys in the holding fund for state fiscal year 2006-07 to be transferred to the HUTF as follows:

● If the revenue estimate prepared by the staff of the legislative council in September of state fiscal year 2006-07 indicates that the amount of total general fund revenues for that state fiscal year will be sufficient to maintain the 4% statutory general fund reserve, requires the state treasurer to transfer from the holding fund to the HUTF on October 15, 2006, an amount equal to the lesser of 25% of the amount estimated in the September revenue estimate to be the portion of the diversion to be accrued and transferred to the HUTF for the entire fiscal year or the balance of the holding fund.

● If the revenue estimate prepared by the staff of the legislative council in December of state fiscal year 2006-07 indicates that the amount of total general fund revenues for that state fiscal year will be sufficient to maintain the 4% statutory general fund reserve, requires the state treasurer to transfer from the holding fund to the HUTF on February 1, 2007, an amount equal to the lesser of the amount needed to ensure that the cumulative amount transferred from the holding fund to the HUTF through February 1, 2007 equals 50% of the amount estimated in the December revenue estimate to be the portion of the diversion to be accrued and transferred to the HUTF for the entire fiscal year or the balance of the holding fund.

● If the revenue estimate prepared by the staff of the legislative council in March of state fiscal year 2006-07 indicates that the amount of total general fund revenues for that state fiscal year will be sufficient to maintain the 4% statutory general fund reserve, requires the state treasurer to transfer from the holding fund to the HUTF on April 15, 2007, an amount equal to the lesser of the amount needed to ensure that the cumulative amount transferred from the holding fund to the HUTF through April 15, 2007, equals 75% of the amount estimated in the March revenue estimate to be the portion of the diversion to be accrued and transferred to the HUTF for the entire fiscal year or the balance of the holding fund.

● Effective June 30, 2007, requires the state controller to accrue all moneys in the holding fund as of that date to the HUTF.

● Generally requires all moneys in the holding fund for state fiscal year 2007-08 or for any succeeding state fiscal year to be transferred to the HUTF as follows:

● If the revenue estimate prepared by the staff of the legislative council in December of state fiscal year 2007-08 or in December of any succeeding state fiscal year indicates that the amount of total general fund revenues for the state fiscal year will be sufficient to maintain the 4% statutory general fund reserve, requires the state treasurer to transfer from the holding fund to the HUTF on February 1 of the fiscal year an amount equal to the lesser of 50% of the amount estimated in the December revenue estimate to be the portion of the diversion to be accrued and transferred to the HUTF for the entire fiscal year or the balance of the holding fund.

● If the revenue estimate prepared by the staff of the legislative council in March of state fiscal year 2007-08 or in March of any succeeding state fiscal year indicates that the amount of total general fund revenues for that state fiscal year will be sufficient to maintain the 4% statutory general fund reserve, requires the state treasurer to transfer from the holding fund to the HUTF on April 15 of the fiscal year, an amount equal to the lesser of the amount needed to ensure that the cumulative amount transferred from the holding fund to the HUTF through April 15 equals 75% of the amount estimated in the March revenue estimate to be the portion of the diversion to be accrued and transferred to the HUTF for the entire fiscal year or the balance of the holding fund.

● Effective June 30 of the 2007-08 state fiscal year, and effective June 30 of each state fiscal year thereafter, generally requires the state controller to accrue all moneys in the holding fund as of June 30 to the HUTF.

● As an exception to the June 30 accrual requirements for both the 2006-07 state fiscal year and for the 2007-08 state fiscal year and each state fiscal year thereafter, requires the state controller to reduce the amount accrued to the HUTF and accrue moneys in the holding fund to the general fund to the extent necessary to ensure that the amount of general fund revenues for the applicable state fiscal year is sufficient to maintain the 4% statutory general fund reserve.

● By requiring the reduction in the amount accrued to the HUTF only to the extent needed to maintain the reserve instead of requiring a reduction in the amount credited to the HUTF to the extent necessary to make all continuous appropriations required by a permanent statute or constitutional provision, maintain the reserve, and fund general fund expenditures up to the statutory appropriation limit as specified in current law, ensures that the portion of the diversion that is allocated through the holding fund to the HUTF will always be fully funded before any general fund surplus is allocated on a 2/3-1/3 basis to the HUTF and the capital construction fund as currently required by law.

● Requires the state treasurer to transfer 90% of the amounts accrued by the state controller on June 30 of the 2006-07 state fiscal year and on June 30 of each state fiscal year thereafter on September 20 of the next state fiscal year and to transfer the remainder of the said amounts on the date on which the state controller distributes the comprehensive annual financial report of the state for the fiscal year.

● To prevent the new procedures for administering the diversion from unnecessarily triggering statutes that require the governor to reduce general fund expenditures in response to revenue shortfalls of a specified magnitude, requires the general fund revenue estimate required by current law to be prepared by the governor with the assistance of the state controller, the office of state planning and budgeting, and the governor's revenue-estimating advisory group to include as general fund revenues any amount of net revenue credited to the holding fund that is expected at the time of the estimate to be accrued and transferred to the general fund.

APPROVED by Governor June 2, 2006
EFFECTIVE June 2, 2006