Colorado § 24-46-406 - State sales tax increment revenue.

§ 24-46-406. State sales tax increment revenue.

(1) In order to implement the collection of state sales tax increment revenue, the resolution adopted by the commission approving a transit investment project shall state that the department shall, after annually retaining an amount of the state sales tax increment revenue established by the department as necessary to offset the department's actual direct costs and expenses incurred in performing the department's collection and disbursement functions established in this part 4 in connection with the transit investment project, divide and distribute state sales taxes levied and collected on in-person sales made within the transit investment area commencing on the first day of the first month after the department has collected the base year revenue for the year after the effective date of the commission's approval of the project as follows:

(a) First, the portion of state sales taxes collected on in-person sales made within the boundaries of the transit investment area equal to the base year revenue as adjusted for the baseline growth rate, if applicable, is paid into the state treasury as state sales taxes are normally collected and paid;

(b) Second, the portion of state sales taxes collected on in-person sales made within the boundaries of the transit investment area equal to the state sales tax increment revenue are paid into a special fund established by the financing entity pursuant to subsection (2) of this section; and

(c) Third, excess state sales tax collections above the maximum annual dollar amount of state sales tax increment revenue in any given year and any cumulative excess state sales tax collections above the total cumulative state sales tax increment revenue are paid into the state treasury as sales taxes are normally collected and paid and, if there is insufficient state sales taxes collected on in-person sales made within the boundaries of the transit investment area to make the allocation described in subsection (1)(b) of this section, to the extent necessary to account for the amount set forth in section 24-46-402 (17)(a)(II), the department shall allocate state sales tax revenue in excess of the state sales tax collected on in-person sales made within the transit investment area, which allocation is nevertheless state sales tax increment revenue.

(2) (a) A financing entity must segregate revenue allocated to the financing entity by the department pursuant to subsection (1)(b) of this section in a special fund. The financing entity shall segregate the special fund from the financing entity's other funds. The financing entity may use the money in the special fund to pay the principal of, the interest on, and any premiums due in connection with the bonds of, loans or advances to, or indebtedness incurred by, whether funded, refunded, assumed, or otherwise, the financing entity for financing or refinancing, in whole or in part, a transit investment project.

(b) A financing entity may use revenue allocated to the financing entity by the department pursuant to subsection (1)(b) of this section solely to finance eligible costs incurred for the purpose of constructing the eligible improvements and implementing the transit investment project.

(3) Except for the amount retained by the department pursuant to subsection (1) of this section, state sales tax increment revenue, together with any investment income earned on that revenue, is for all purposes assigned to, the property of, and the revenue of the applicable financing entity and is not for any purpose revenue or property of the state.

(4) A single debt issuance of a financing entity must not have a maturity date in excess of thirty years from the date of issuance, unless the financing entity both:

(a) Anticipates issuing a series of bonds or other forms of debt; and

(b) Has the ability to consolidate or refinance previously issued debt or bonds with a maturity date for such consolidated or refinanced debt or bonds not to exceed thirty years from the date of issuance of the consolidating or refinancing bonds.

(5) No local government shall be liable for any debt issuance of the financing entity, and a debt issuance of the financing entity shall not constitute a debt of a local government.

(6) On or before July 1, 2029, and on or before July 1 every three years thereafter, the department must submit a report to the office of state planning and budgeting and the commission on technological or other methods to incorporate sales delivered from without the transit investment area into the calculation of the increment and to allow for the designation of additional transit and housing investment zones and transit investment areas, including cost estimates, administrative burden, and burden on taxpayers.

Source: L. 2026: Entire part added, (HB 26-1065), ch. 157, p. 910, § 2, effective May 27.