HOUSE 3rd Reading Unamended April 2, 2015 HOUSE Amended 2nd Reading April 1, 2015First Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 15-0696.01 Esther van Mourik x4215HOUSE BILL 15-1159 HOUSE SPONSORSHIP Arndt, SENATE SPONSORSHIP Donovan, House Committees Senate Committees Agriculture, Livestock, & Natural Resources Finance Appropriations A BILL FOR AN ACT Concerning the instream flow incentive tax credit for water rights holders. 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.) In 2009, the general assembly enacted the instream flow incentive tax credit for water rights holders for 6 years. When enacted, the tax credit included a trigger that made the credit unavailable if total general fund revenues for a particular fiscal year would not be sufficient to grow the total state general fund appropriations by 6% over the previous fiscal year's appropriations. The bill extends the instream flow incentive tax credit for water rights holders for an additional 5 income tax years. The bill also makes a change to the requirements of the donation, specifying that the donation may either preserve or improve the environment, rather than requiring that the donation only preserve the environment as originally enacted. Additionally, the bill removes the application of the trigger to the tax credit. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. The general assembly hereby finds and declares that the purpose of this tax expenditure is to extend the instream flow incentive tax credit because an incentive to encourage voluntary water rights donations helps to preserve Colorado's streams and lakes. SECTION 2. In Colorado Revised Statutes, 39-22-533, amend (2) (a), (2) (b), (2) (d), (5) introductory portion, and (9); and repeal (6) as follows: 39-22-533. Instream flow incentive tax credit for water rights holders - rules - definitions - repeal. (2) (a) Except as provided in subsection (6) of this section, For income tax years commencing on or after January 1, 2009, but prior to January 1, 2015 January 1, 2018, there may, at the discretion of the board, be allowed to any person an instream flow incentive tax credit with respect to the income taxes imposed by this article in the amount determined by the board pursuant to paragraph (b) of this subsection (2). (b) The board shall have the exclusive authority to approve any instream flow incentive tax credits allowed pursuant to paragraph (a) of this subsection (2). The credit shall only be available for permanent transfers of water rights acquired pursuant to the board's public review process specified in 2 CCR 408-2, paragraphs 6m. and 11., and upon a finding by the board, in accordance with section 37-92-102 (3), C.R.S., that the proposed donation will preserve the environment to a reasonable degree. The credit shall not be available for a water right that is decreed for irrigation on land for which a conservation easement tax credit is claimed pursuant to section 39-22-522 unless such water right is specifically excluded from the terms of such conservation easement. The board shall approve a credit by issuing to the person a credit certificate on or before September December 1 of the tax year in which the donation is accepted. (d) In no event shall the board issue a credit certificate if the aggregate sum of credits approved by the board pursuant to this section and not yet eligible to be taken as described in subsection (6) of this section exceeds two million dollars. (5) No later than November 30, 2009, and no later than November 30 of each year thereafter, The board shall, in a sufficiently timely manner to allow the department to process returns claiming the credit allowed by this section, provide the department an electronic report of the taxpayers receiving a credit for that income tax year that includes the following information: (6) If the revenue estimate prepared by the staff of the legislative council in June 2009 and each June thereafter indicates that the amount of the total general fund revenues for that particular fiscal year will not be sufficient to grow the total state general fund appropriations by six percent over such appropriations for the previous fiscal year, then the credit authorized in this section shall not be allowed for any income tax year commencing during the calendar year in which the forecast is prepared. The credit certificate shall remain valid for the next tax year in which the revenue estimate prepared by the staff of the legislative council indicates that the amount of the total general fund revenues will be sufficient to grow the total state general fund appropriations by six percent over such appropriations for the previous fiscal year. (9) This section is repealed, effective December 31, 2024 December 31, 2027. 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.