Second Regular Session Sixty-ninth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 14-0133.01 Esther van Mourik x4215HOUSE BILL 14-1305 HOUSE SPONSORSHIP McCann and Sonnenberg, SENATE SPONSORSHIP Hodge and Brophy, House Committees Senate Committees Finance Appropriations A BILL FOR AN ACT Concerning a taxpayer's ability to seek a refund of enterprise zone investment tax credit carryovers allowed for renewable energy investments as such investments are currently defined in law. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) Current law allows an income tax credit for taxpayers who make certain investments in an enterprise zone. If an allowed tax credit is more than a taxpayer may claim, the excess credit becomes an investment tax credit carryover for a number of years depending on the type of investment and when it was made. The bill allows a taxpayer making a renewable energy investment to annually elect, including in the year a qualified investment is made, to reduce the taxpayer's investment tax credit carryover and receive a refund in an amount up to $2.5 million per income tax year. For every 85 cents received as a refund, the taxpayer's investment tax credit carryover is reduced by one dollar. The bill requires the taxpayer to make an election on the taxpayer's original income tax return. The bill also requires a taxpayer electing to receive a refund to file a one-time affidavit with the Colorado economic development commission no later than the date of the taxpayer's first refund election that states it is the taxpayer's intention to make further renewable energy investments within 5 years of the date of the affidavit. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. The general assembly finds and declares that the goal of the tax expenditure in this act is to allow for the reduction in the state's overall liability for certified enterprise zone investment tax credits by allowing taxpayers who make renewable energy investments in an enterprise zone to elect to monetize their tax credit carryover by up to two million five hundred thousand dollars annually. For every eighty-five cents that a taxpayer receives as a refund, the taxpayer's investment tax credit carryover is reduced by one dollar, thus reducing the state's liability for existing and future enterprise zone investment tax credit carryovers by fifteen percent. This change ensures continued investment in renewable energy projects in the state's enterprise zones and helps Colorado remain competitive with neighboring renewable energy markets. The general assembly further finds and declares that this change in tax policy is intended to increase renewable energy investment and thus increase associated jobs and expand the tax base in rural Colorado. SECTION 2. In Colorado Revised Statutes, 39-30-104, amend (2) (c) (III), (2.5) (a), and (2.7); and add (2.6) as follows: 39-30-104. Credit against tax - investment in certain property - definition. (2) (c) (III) (A) Except as provided in sub-subparagraph (B) of this subparagraph (III) and in subsection (2.6) of this section, any excess credit allowed pursuant to this paragraph (c) shall be an investment tax credit carryover to each of the fourteen income tax years following the unused credit year. (B) Except as provided in subsection (2.6) of this section, any excess credit allowed pursuant to this paragraph (c) for a renewable energy investment made in an income tax year commencing before January 1, 2018, shall be an investment tax credit carryover for twenty-two income tax years following the year the credit was originally allowed. (2.5) (a) (I) Notwithstanding the provisions of section 39-22-507.5 (7) (b), and except as otherwise provided in subparagraph (II) of this paragraph (a), and paragraph (b) of this subsection (2.5), and subsection (2.6) of this section, any excess credit allowed pursuant to this section shall be an investment tax credit carryover to each of the twelve income tax years following the unused credit year. (II) Except as provided in subsection (2.6) of this section, any excess credit claimed pursuant to this section for a renewable energy investment made in an income tax year commencing before January 1, 2018, shall be an investment tax credit carryover for twenty income tax years following the year the credit was originally allowed. (2.6) (a) In each income tax year commencing on or after January 1, 2014, a taxpayer who has made a renewable energy investment prior to the effective date of this subsection (2.6) or who makes a renewable energy investment on or after the effective date of this subsection (2.6) that resulted in an investment tax credit carryover pursuant to sub-subparagraph (B) of subparagraph (III) of paragraph (c) of subsection (2) of this section and subparagraph (II) of paragraph (a) of subsection (2.5) of this section may annually elect, including in the year a qualified investment is made, to reduce its investment tax credit carryover and receive a refund in an amount up to two million five hundred thousand dollars as follows: (I) For every eighty-five cents received as a refund, the taxpayer's investment tax credit carryover pursuant to sub-subparagraph (B) of subparagraph (III) of paragraph (c) of subsection (2) of this section and subparagraph (II) of paragraph (a) of subsection (2.5) of this section is reduced by one dollar; and (II) The taxpayer shall make such an election on the taxpayer's original income tax return. (b) A taxpayer electing to receive a refund pursuant to this subsection (2.6) shall file a one-time affidavit with the Colorado economic development commission no later than the date of the taxpayer's first refund election that states it is the taxpayer's intention to make further renewable energy investments within five years of the date of the affidavit. (2.7) (a) The Colorado economic development commission shall annually post on its web site or on the Colorado office of economic development's web site the following information regarding any enterprise zone investment tax credit certified under this section: (a) (I) The enterprise zone for the certified credit; (b) (II) The name of the taxpayer or business; (c) (III) The type of business; (d) (IV) The tax year for which the credit is certified; (e) (V) The total qualified investment reported; (f) (VI) Whether the credit is for a renewable energy investment as defined in subsection (2.8) of this section; (g) (VII) The amount of the qualified investment that qualifies for the credit; (h) (VIII) The calculated credit; and (i) (IX) The county where the qualified investment is made. (b) No later than November 1, 2019, the Colorado economic development commission shall post on its web site or on the Colorado office of economic development's web site the level of renewable energy investment on and after the effective date of this subsection (2.7), as amended. SECTION 3. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.