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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0482.01 BJA HOUSE BILL 98­1165

STATE OF COLORADO

BY REPRESENTATIVE Musgrave;

also SENATOR Ament. REREVISED

FINANCE

A BILL FOR AN ACT

CONCERNING A CHANGE IN STATE INCOME TAX POLICY TO ENCOURAGE DONATIONS OF FOOD TO QUALIFIED NONPROFIT ORGANIZATIONS THAT PROVIDE FOOD TO NEEDY INDIVIDUALS FREE OF CHARGE.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.)

For income tax years commencing on and after January 1, 1998, allows taxpayers:

$ An income tax credit for agricultural crops donated to a qualified nonprofit organization to be used to feed needy persons in Colorado free of charge when such use is related to the charitable purpose or function of the nonprofit organization;

$ An income tax credit for in­kind contributions to a qualified nonprofit organization to be used to feed needy persons in Colorado free of charge when such use is related to the charitable purpose or function of the nonprofit organization.

Specifies the amount of said credits. Disallows unused amounts of said credits to be carried forward. Requires the receiving nonprofit organization to verify the type and quantity of donated food, the name of the taxpayer donor, and the name and address of the nonprofit organization. Prohibits a taxpayer who has been allowed a credit for crop or livestock donations from claiming a credit for gleaned agricultural crops or an in­kind contribution for the same donated crop. Prohibits a taxpayer who has been allowed a credit for gleaned agricultural crops from claiming a credit for an in­kind contribution for the same donated crop.


Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  Part 5 of article 22 of title 39, Colorado Revised Statutes, is amended BY THE ADDITION OF THE FOLLOWING NEW SECTIONS to read:

39­22­522.  Tax credit for gleaned agricultural crops. (1)  FOR INCOME TAX YEARS COMMENCING ON AND AFTER JANUARY 1, 1998, THERE SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED PURSUANT TO THIS ARTICLE FOR EACH TAXPAYER WHO GROWS AN AGRICULTURAL CROP IN COLORADO AND PERMITS THE GLEANING OF SUCH AGRICULTURAL CROP OR A PORTION OF SUCH AGRICULTURAL CROP. THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION (1) SHALL BE AN AMOUNT EQUAL TO TWENTY­FIVE PERCENT OF THE WHOLESALE MARKET PRICE OF THE QUANTITY OF THE GLEANED AGRICULTURAL CROP.

(2)  IF THE AMOUNT OF THE CREDIT PROVIDED FOR PURSUANT TO THE PROVISIONS OF SUBSECTION (1) OF THIS SECTION 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 AMOUNT OF THE CREDIT NOT USED AS AN OFFSET AGAINST INCOME TAXES IN SAID INCOME TAX YEAR MAY NOT BE CARRIED FORWARD AS A CREDIT AGAINST SUBSEQUENT YEARS' INCOME TAX LIABILITY.

(3)  UPON THE GLEANING OF AN AGRICULTURAL CROP, THE QUALIFIED NONPROFIT ORGANIZATION TO WHICH THE GLEANED AGRICULTURAL CROP IS DONATED SHALL PROVIDE TO THE TAXPAYER A VERIFICATION FORM SPECIFYING THE TYPE AND QUANTITY OF THE GLEANED AGRICULTURAL CROP, THE NAME OF THE TAXPAYER DONOR, AND THE NAME AND ADDRESS OF THE QUALIFIED NONPROFIT ORGANIZATION. THE VERIFICATION FORM SHALL BE SIGNED AND DATED BY A PERSON AUTHORIZED BY THE QUALIFIED NONPROFIT ORGANIZATION TO WHICH THE GLEANED AGRICULTURAL CROP IS DONATED. THE TAXPAYER SHALL FILE THE VERIFICATION FORM AND AN ACCOUNTING OF THE WHOLESALE MARKET PRICE OF THE GLEANED AGRICULTURAL CROP RECEIVED BY THE QUALIFIED NONPROFIT ORGANIZATION AS STATED ON THE VERIFICATION FORM WITH THE DEPARTMENT OF REVENUE FOR THE PURPOSE OF CLAIMING THE CREDIT ALLOWED PURSUANT TO SUBSECTION (1) OF THIS SECTION.

(4)  A TAXPAYER WHO IS ALLOWED A CREDIT PURSUANT TO SECTION 39­22­301 (3) (b) SHALL NOT BE ELIGIBLE TO CLAIM A CREDIT FOR A GLEANED AGRICULTURAL CROP PURSUANT TO THIS SECTION FOR THE SAME AGRICULTURAL CROP SO DONATED.

(5)  FOR PURPOSES OF THIS SECTION:

(a) (I)  "GLEANING" MEANS THE HARVESTING OF AN AGRICULTURAL CROP:

(A)  THAT IS GROWN PRIMARILY TO BE SOLD FOR CASH, THAT IS CUSTOMARY FOOD OR IS SUITABLE FOR HUMAN CONSUMPTION, AND THAT IS DONATED BY THE GROWER AT A TIME THAT THE AGRICULTURAL CROP IS STILL SUITABLE FOR HUMAN CONSUMPTION; AND

(B)  THAT IS DONATED BY THE GROWER TO A QUALIFIED NONPROFIT ORGANIZATION TO BE USED FOR THE PURPOSE OF PROVIDING FOOD OR MEALS TO NEEDY PERSONS IN COLORADO FREE OF CHARGE AND SUCH PURPOSE IS RELATED TO THE PURPOSE OR FUNCTION CONSTITUTING THE BASIS FOR THE QUALIFIED NONPROFIT ORGANIZATION BEING EXEMPT FROM TAXATION UNDER THE INTERNAL REVENUE CODE.

(II)  "GLEANING" DOES NOT INCLUDE THE HARVESTING OF AN AGRICULTURAL CROP THAT IS TRANSFERRED TO A QUALIFIED NONPROFIT ORGANIZATION IN EXCHANGE FOR MONEY OR OTHER PROPERTY OR SERVICES OR FOR USE OUTSIDE COLORADO.

(b)  "QUALIFIED NONPROFIT ORGANIZATION" MEANS ANY ORGANIZATION THAT IS ORGANIZED AND OPERATED FOR CHARITABLE PURPOSES AND THAT IS EXEMPT FROM TAXATION UNDER SECTION 501 (c) (3) OF THE INTERNAL REVENUE CODE.

(c)  "WHOLESALE MARKET PRICE" MEANS THE WHOLESALE MARKET PRICE FOR THE GLEANED AGRICULTURAL CROP DETERMINED BY THE TAXPAYER BASED UPON THE AVERAGE WHOLESALE MARKET PRICE FOR THE GLEANED AGRICULTURAL CROP IN THE NEAREST REGIONAL MARKET DURING THE MONTH IN WHICH THE DONATION IS MADE, DETERMINED WITHOUT CONSIDERATION OF GRADE OR QUALITY OF THE GLEANED AGRICULTURAL CROP AND AS IF THE QUANTITY OF THE GLEANED AGRICULTURAL CROP WAS MARKETABLE.

39­22­523.  Tax credit for in­kind donations to nonprofit organizations providing food to needy persons. (1)  FOR INCOME TAX YEARS COMMENCING ON AND AFTER JANUARY 1, 1998, THERE SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED PURSUANT TO THIS ARTICLE FOR EACH TAXPAYER WHO MAKES AN IN­KIND CONTRIBUTION TO A QUALIFIED NONPROFIT ORGANIZATION TO BE USED FOR THE PURPOSE OF PROVIDING FOOD OR MEALS TO NEEDY PERSONS IN COLORADO FREE OF CHARGE AND SUCH PURPOSE IS RELATED TO THE PURPOSE OR FUNCTION CONSTITUTING THE BASIS FOR THE QUALIFIED NONPROFIT ORGANIZATION BEING EXEMPT FROM TAXATION UNDER SECTION 501 (c) (3) OF THE INTERNAL REVENUE CODE. THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION (1) SHALL BE AN AMOUNT EQUAL TO TWENTY-FIVE PERCENT OF THE TOTAL VALUE OF THE IN­KIND CONTRIBUTION.

(2)  IF THE AMOUNT OF THE CREDIT PROVIDED FOR PURSUANT TO THE PROVISIONS OF SUBSECTION (1) OF THIS SECTION EXCEEDS THE AMOUNT OF INCOME TAXES OTHERWISE DUE ON THE INCOME OF THE TAXPAYER IN THE INCOME TAX YEAR FOR WHICH THE CREDIT IS BEING CLAIMED, THE AMOUNT OF THE CREDIT NOT USED AS AN OFFSET AGAINST INCOME TAXES IN SAID INCOME TAX YEAR MAY NOT BE CARRIED FORWARD AS A CREDIT AGAINST SUBSEQUENT YEARS' INCOME TAX LIABILITY.

(3)  UPON THE TAXPAYER MAKING AN IN­KIND CONTRIBUTION, THE QUALIFIED NONPROFIT ORGANIZATION TO WHICH THE IN­KIND CONTRIBUTION IS MADE SHALL PROVIDE TO THE TAXPAYER A VERIFICATION FORM SPECIFYING THE TYPE AND QUANTITY OF THE IN­KIND CONTRIBUTION, THE NAME OF THE TAXPAYER CONTRIBUTOR, AND THE NAME AND ADDRESS OF THE QUALIFIED NONPROFIT ORGANIZATION. THE VERIFICATION FORM SHALL BE SIGNED AND DATED BY A PERSON AUTHORIZED BY THE QUALIFIED NONPROFIT ORGANIZATION TO WHICH THE IN­KIND CONTRIBUTION IS MADE. THE TAXPAYER SHALL FILE THE VERIFICATION FORM AND AN ACCOUNTING OF THE VALUE OF THE IN­KIND CONTRIBUTION RECEIVED BY THE QUALIFIED NONPROFIT ORGANIZATION AS STATED ON THE VERIFICATION FORM WITH THE DEPARTMENT OF REVENUE FOR THE PURPOSE OF CLAIMING THE CREDIT ALLOWED PURSUANT TO SUBSECTION (1) OF THIS SECTION.

(4)  A TAXPAYER WHO IS ALLOWED A CREDIT PURSUANT TO SECTION 39­22­301 (3) (b) OR 39­22­522 SHALL NOT BE ELIGIBLE TO CLAIM A CREDIT FOR AN IN­KIND CONTRIBUTION PURSUANT TO THIS SECTION FOR THE SAME AGRICULTURAL CROP SO DONATED.

(5)  FOR PURPOSES OF THIS SECTION:

(a)  "IN­KIND CONTRIBUTION" MEANS 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.

(b)  "QUALIFIED NONPROFIT ORGANIZATION" MEANS ANY ORGANIZATION THAT IS ORGANIZED AND OPERATED FOR CHARITABLE PURPOSES AND THAT IS EXEMPT FROM TAXATION UNDER SECTION 501 (c) (3) OF THE INTERNAL REVENUE CODE.

SECTION 2.  No appropriation.  The general assembly has determined that this act can be implemented within existing appropriations, and therefore no separate appropriation of state moneys is necessary to carry out the purposes of this act.

SECTION 3.  Effective date.  This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.