Colorado Legislative Council Staff



TABOR Refund Impact

(Replaces Fiscal Note dated January 3, 1998)

State General Fund Revenue Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-482

Rep. Musgrave

Sen. Ament


Bill Status:

Fiscal Analyst:

February 23, 1998

Senate Finance

Harry Zeid (866-4753)



Summary of Legislation


FY 1998/99

FY 1999/2000

FY 2000/2001

State Revenues

General Fund

Other Fund

General Fund Revenue Reduction

State Expenditures

General Fund

Other Fund




FTE Position Change




Local Government Impact — None Identified

             *The tax credit would be effective for income tax years commencing on and after January 1, 1998. Therefore, on an accrual accounting basis, there would be a six-month impact in FY 1997-98.

            Effective for income tax years commencing on and after January 1, 1998, this reengrossed bill would allow an income tax credit for each taxpayer who grows an agricultural crop in the state and permits the gleaning of the agricultural crop, or a portion of the crop. The credit would be equal to 25 percent of the wholesale market price of the gleaned agricultural crop. An income tax credit equal to 25 percent of the total value of an in-kind contribution would also be given to a taxpayer who makes an in-kind contribution to a qualified nonprofit organization to be used for the purpose of providing free food or meals to needy persons in the state. If the credit provided exceeds the amount of income taxes otherwise due on the taxpayer’s income in the income tax year for which the credit is being claimed, the credit may be carried forward against subsequent years’ income tax liability.

            The bill defines “gleaning” as the harvesting of an agricultural crop that is food or is suitable for human consumption, that is grown primarily to be sold for cash, and is donated by the grower to a qualified nonprofit organization to be used for the purpose of providing free food or meals to needy persons in Colorado. An “in-kind contribution” is defined as any fowl, animal, vegetable, or other food stuff, product, or article that is customary food or is suitable for human consumption and that, at the time of contribution, is still suitable for human consumption.

            The two new tax credits would reduce General Fund revenues at the state level. Therefore, the bill is assessed as having state revenue fiscal impact. The bill will become effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution.

State Revenues

            The number of taxpayers that would claim the tax credit for donations of gleaned agricultural crops or in-kind contributions is unknown. Similarly, the value of the tax credit, which would equal to 25 percent of the value of the donated products, with an upper limit of the taxpayer’s current year income tax liability, is unknown. Therefore, the value of the General Fund revenue reduction that would occur as a result of the tax credits has not been estimated.

            The bill provides that a taxpayer who is allowed an income tax credit pursuant to Section 39-22-301 (3)(b), C.R.S., would not be eligible to claim the income tax credit authorized by the bill for the same gleaned agricultural crop. Under current law, corporate taxpayers are allowed an income tax credit equal to 25 percent of the wholesale market price, or 25 percent of the most recent sale price of crop contributions or livestock contributions, or both, made to a tax-exempt charitable organization. However, this current law credit may not exceed $1,000 per tax year.

TABOR Refund Impact

            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

State Expenditures

            The bill contains a No Appropriation Clause. This fiscal note presumes that no additional expenditures would be required by the Department of Revenue in order to include the income tax credit on the individual and corporate income tax forms. Based on an agreement with the Joint Budget Committee, Legislative Council Fiscal Note Staff, and the Department of Revenue, the Department of Revenue will absorb the costs of approximately 50 hours of programming time necessary to make these changes during the normal annual rewrite by the Department.

Spending Authority

            This fiscal note would imply that no new spending authority or appropriations are required for FY 1998-99 to implement the provisions of the bill.

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