Colorado § 24-36-401 - Legislative declaration - tax preference performance statement.

§ 24-36-401. Legislative declaration - tax preference performance statement.

(1) The general assembly finds and declares that:

(a) The insurance premium tax credits authorized by this part 4 are not refundable and do not impose an obligation of payment in any future year on the state;

(b) The use of proceeds from the sale of insurance premium tax credits does not require the state to borrow money, extend or pledge the state's credit, or obligate the state to make future payments from state revenue;

(c) The sale and use of the tax credits shall not be deemed or construed as creating indebtedness or other financial obligation whatsoever within the meaning of any provision of the state constitution or the laws of the state concerning or limiting the creation of indebtedness or other financial obligation by the state;

(d) The tax credits allow an insurance company with an insurance premium tax liability to prepay its tax liability for future years, which does not constitute a tax policy change under section 20 (4)(a) of article X of the state constitution; and

(e) Any proceeds from the sale of the tax credits will be offset by decreases in future revenue resulting from the buyer's use of the tax credits and therefore will not cause a net tax revenue gain under section 20 (4)(a) of article X of the state constitution.

(2) (a) In accordance with section 39-21-304 (1), which requires each bill that creates a new tax expenditure to include a tax preference performance statement as part of a statutory legislative declaration, the general assembly further finds and declares that the general purposes of the tax credits provided for in this part 4 are to induce certain designated behavior by taxpayers and provide a reduction in insurance premium tax liability for certain businesses. Specifically, this tax expenditure is intended to induce insurance companies to purchase tax credits that will reduce their future insurance premium tax liability in order to generate money for the health insurance affordability cash fund created in section 10-16-1206 (1) and the general fund.

(b) The general assembly and the state auditor shall measure the effectiveness of the tax credits in achieving the purposes specified in subsection (2)(a) of this section based on the number and value of the credits claimed and the total amount of money generated for the health insurance affordability cash fund and the general fund. The division of insurance shall provide the state auditor with information regarding the total amount of credits claimed and the amount of money generated for the health insurance affordability cash fund and the general fund.

Source: L. 2025, 1st Ex. Sess.: Entire part added, (HB 25B-1004), ch. 8, p. 25, § 1, effective August 28; (2) amended, (HB 25B-1006), ch. 10, p. 48, § 6, effective August 29.

Editor's note: Section 17(2) of chapter 10 (HB 25B-1006), Session Laws of Colorado 2025, First Extraordinary Session, provides that the act changing subsection (2) takes effect only if HB 25B-1004 becomes law and takes effect one day after the effective date of HB 25B-1004. HB 25B-1004 became law and took effect August 28, 2025.