Second Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 16-1064.01 Kate Meyer x4348 SENATE BILL 16-175 SENATE SPONSORSHIP Grantham, HOUSE SPONSORSHIP Pabon, Senate Committees House Committees Finance Appropriations A BILL FOR AN ACT Concerning a state income tax credit for retail dealers selling E-15 gasoline. 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.) The bill creates an income tax credit for retail dealers selling E-15 gasoline. The amount of credit to which a taxpayer is entitled is $.03 per gallon of E-15 gasoline sold in the tax year for which the credit is claimed. The credit is available for 3 tax years, commencing January 1, 2017. Any portion of the credit to which a taxpayer is entitled but exceeds the taxpayer's income tax liability may not be carried forward, but must be refunded to the taxpayer. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add 39-22-538 as follows: 39-22-538. E-15 gasoline promotion tax credit - eligibility - rules - legislative declaration - definitions - repeal. (1) (a) The general assembly finds, determines, and declares that: (I) Colorado has long embraced the use of a wide range of fuels for motor vehicles, from traditional gasoline and diesel to alternative fuels; (II) Legislation has been passed to define what constitutes an alternative fuel and to set forth utilization strategies for the state's motor vehicle fleet to use alternative fuels; (III) Consistent with the call for utilization of alternative fuels in section 24-30-1104 (2) (c) (II), C.R.S., the ability to incentivize private sector fuel providers in the state to invest in necessary equipment, and to buy, store, and dispense these alternative fuels is necessary; (IV) The utilization of alternative fuels like E-15 gasoline, which blends corn ethanol, a renewable fuel source, with a petroleum base, offers a greater consumer choice for alternative fuel purchases and assists the state motor vehicle fleet in meeting the goals for alternative fuel usage; (V) The ability of private fuel distributors to provide E-15 gasoline as an alternative fuel option is an investment that is needed in the state; and (VI) The benefit of utilizing a major Colorado agricultural cash crop while increasing the use of an alternative fuel provides the state a dual advantage going forward. (b) Therefore, to incentivize the investment in and promote the distribution of E-15 gasoline in the state in accordance with existing objectives for use of alternative fuels, this section creates a tax credit for retail dealers selling E-15 gasoline in the state. (2) As used in this section, unless the context otherwise requires: (a) "E-15 gasoline" means ethanol-blended gasoline formulated with a percentage of between fifteen and fifty percent by volume of ethanol. (b) "Ethanol" means ethyl alcohol that is to be blended with gasoline. (c) "Gasoline" means any liquid product prepared, advertised, offered for sale or sold for use as, or commonly and commercially used as, motor fuel for use in a spark-ignition, internal combustion engine. (d) "Motor fuel pump" means a motor fuel pump that the division of oil and public safety in the department of labor and employment certifies and labels to sell E-15 gasoline. (e) "Retail dealer" means a person engaged in the business of storing and dispensing motor fuel from a motor fuel pump for sale on a retail basis, regardless of whether the motor fuel pump is located at a retail motor fuel site including a permanent or mobile location. (f) "Retail motor fuel site" means a geographic location in the state where a retail dealer sells and dispenses motor fuel on a retail basis. (g) "Sell" means to sell on a retail basis. (3) For any income tax year commencing on or after January 1, 2017, but prior to January 1, 2020, a taxpayer is allowed a credit against the income taxes imposed by this article if: (a) The taxpayer is a retail dealer who sells and dispenses E-15 gasoline through a motor fuel pump located at the retail dealer's retail motor fuel site during the calendar year or portion of the calendar year for which the tax credit is claimed as provided in this section; and (b) The retail dealer complies with rules of the department established to administer this section. (4) The amount of a credit that may be claimed under this section is three cents per gallon of E-15 gasoline dispensed through a motor fuel pump that is sold by the retail dealer in the tax year for which the credit is claimed. (5) If a credit authorized in this section exceeds the income tax due on the income of the taxpayer for the taxable year, the excess credit may not be carried forward and must be refunded to the taxpayer. (6) An individual may claim the tax credit allowed a partnership, limited liability company, S corporation, estate, or trust electing to have the income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual's earnings of a partnership, limited liability company, S corporation, estate, or trust. (7) This section is repealed, effective July 1, 2021. SECTION 2. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 10, 2016, if adjournment sine die is on May 11, 2016); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2016 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.