HB 1004 — Continuation of Child Care Contribution Tax Credit

NOTE:

This bill has been prepared for the signatures of the appropriate legislative officers and the Governor.

To determine whether the Governor has signed the bill or taken other action on it, please consult the legislative status sheet, the legislative history, or the Session Laws.

alsoSENATOR(S)ColemanandSimpson,Bright,Jodeh,Kipp,Marchman,also PeltonB.,PeltonR.,Amabile,Ball,Benavidez,Bridges,Cutter,Daugherty,SENATOR(S)Colemanand Simpson,Bright,Jodeh,Kipp, Marchman, PeltonB., PeltonR., Amabile,Ball,Benavidez,Bridges, Cutter,Daugherty, Exum, Gonzales J., Kolker, Lindstedt, Mullica, Roberts, Snyder, Sullivan, Wallace, Weissman.

CCONCERNING ONCERNING A CONTINUATION OF THE INCOME TAX CREDIT FOR A QUALIFYINGCONTRIBUTIONQUALIFYING CONTRIBUTION TO PROMOTE CHILD CARE IN THE STATESTATE. .

Be it enacted by the GeneralGeneralAssembly Assemblyofthe of the State ofofColorado: Colorado:

(1)( 1) The general assembly finds and declares that:

(a) A robust child care and education ecosystem is critical for Colorado's economy and the health and well-being ofofColorado's Colorado's children;

(b) The child care contribution tax credit has been an essential Capitalthrough letterswords or boldnumbers &indicate italicdeletionsfrom numbersexisting indicatelaw newandsuch material addedis tonot existingpart law;of the act.

dashessource throughoffunding wordsfor orchild numberscare indicatefacilities deletionsthroughout fromColorado existingsince law1998, allowing individuals and suchcorporations materialwho ismake notcharitable partcontributions ofto thechild act.care facilities to receive 50% oftheir donations back in tax credits;

source(c) ofIn funding2022, forthe child care facilitiescontribution throughouttax Coloradocredit sincebenefitted 1998,approximately allowing18,000Coloradans,whoreceivedadditionalrevenueontheir individualstax returns and corporationsgenerated who$60 makemillion charitablefor contributions to child care facilitiesproviders; to receive 50% of their donations back in tax credits;

(c)(d) InThroughout 2022,Colorado, child care providers use the child care contribution tax credit benefittedto approximately18,000Coloradans,whoreceivedadditionalrevenueontheiropen taxnew returnschild andcare generatedcenters $60in million for child care providers;deserts, enroll families with low incomes who would otherwise be unable to access care, and recruit and retain staff;

(d)(e) ThroughoutThe Colorado, child care providers use the child care contribution tax credit tosupports openthe newColorado childeconomy careby centersempowering inlocal childbusinesses careand deserts,supporting enrollsalaries familiesfor withchild lowcare incomesproviders; whowould otherwise be unable to access care, and recruit and retain staff;

(e)and The(f) In the face ofuncertain federal support and a challenging state budget environment, renewing the child care contribution tax credit supportsfor the10 years is critical to support Colorado economybyempoweringlocalchild businessescare and supportingafter-school salariesforchildproviders, carefamilies, providers;and local economies.

and (f) In the face of uncertain federal support and a challenging state budget environment, renewing the child care contribution tax credit for 10 years is critical to support Colorado child care and after-school providers, families, and local economies.

andanrepeal repeal (6.8)(c) as follows:

Creditforchildcarefacilities-legislativedeclarationCreditfor child carefacilities -legislativedeclaration - definitions - repeal.

(1.5) For income tax years commencing prior to January 1, 2028 JANUARY 1, 2038, any taxpayer who makes a monetary contribution to promote child care in the state is allowed a credit against the income tax imposed by this article 22 in an amount equal to fifty percent of the total value ofofthe the contribution, except as otherwise provided in subsections (5) and (6.7) ofofthis this section.

(6.8) (a) In accordance with section 39-21-304 (1), which requires each bill that extends a tax expenditure to include a AMEND THE tax preference performance statement as THAT IS part of a THE statutory legislative declaration if one was""as not previously included in OF the tax expenditure, the general assembly finds and declares that the general PAGE 2-HOUSE BILL 26-1004 purpose of this tax expenditure is intended to induce certain designated behavior by taxpayers Specifically, AND THAT this tax expenditure is SPECIFICALLY intended to encourage taxpayers to make donations that promote child care IN THE STATESTATE. .

(c) ThedepartmentofrevenueshallconsultwiththeearlychildhoodThe leadershipdepartmentoftcvcnuc shall consult withtheca1ly childhood leadc1ship commission createdc1catcd in section 26.5-1-302, the public-privatepublic-piivatc collaborationcollaborntion unit in the department of personnelpc1sonnel createdc1catcd in section 24-94-103 (2), and the department of earlycady childhood createdc1catcd in section 26.5-1-104 (1) to study possible improvementimprnvcmcnt to the tax creditc1cdit allowed pursuantpmsuant to this section and to develop recommendations1ccommcndations forfut furtherfu1thc1 measuringmcasming the effectivenesscffectivcncss ofofthe the tax credit.c1edit.

On or01 beforebcfu1c July 31, 2024, the departmentdepartnxcnt ofof1cvcnuc revenue shall deliverdcli~c1 to the joint budget committee, the finance committees ofofthe the senate and the house of representatives,Iep1cscntativcs, and the office ofofthe the state auditorauditm the recommendations1ccommcndations developed pursuantpmsuant to this subsection (6.8)(c).(6.S)(c).

In addition to recommendations1ccommcndations forfut furtherfurthc1 measuringnrcasming the effectivenesscffccti~cncss of the tax credit,c1edit, the recommendationsIccommcndations must include recommendations1ccommcndations for:fut.

(I) ImprovingImprnving the structure,oversight,andadministrationstmctmc, ofovc1sight, and administrntion ofthe tax c1cdit, (11) Developing mechanisms to infu1m taxpayc1s and eligible child ca1c facilities and prngrnms about the availability ofthe tax credit;c1cdit, (Ill) Ensming the tax c1edit is equitably prnmoting child catc in all communities, and (IV) Allowing donations of in-kind Ical prnpcrey to qualify as an eligible contdbution to prnmotc child ca1c.

(II)(7) DevelopingThis mechanismssection tois informrepealed, taxpayerseffective andJanuary eligible1, child2035JANUARY care1, facilities2045. and programs about the availability of the tax credit;

(III) Ensuring the tax credit is equitablypromoting child care in all communities;

and (IV) Allowing donations of in-kind real property to qualify as an eligible contribution to promote child care.

(7) This section is repealed, effective January 1, 2035 ANUARY 1, 2045.

on the day following the expiration of the ninety-dayperiodninety-day period after final adjournment ofofthe the general assembly(Augustassembly (August 12, 2026, if adjournment sine die is on May 13, 2026);

except that, if a referendumpetitionisfiledpursuanttosection1(3)ofarticleVofthestatereferendum petition is filed pursuantto section 1(3) ofarticle V ofthe state constitution against this act or an item, section, or part of this act within PAGE 3-HOUSE BILL 26-1004 such period, then the act, item, section, or part will not take effect unless approvedbythepeopleatthegeneralelectiontobeheldinNovember2026approved by thepeople atthe general election to beheld inNovember2026 and, in such case, will take effect on the date ofofthe the official declaration of the vote thereon by the governor.

____________________________J ____________________________~ Julie McCluskie James Rashad Coleman, Sr.

SPEAKER OF THE HOUSE PRESIDENT OF OF REPRESENTATIVES THE SENATE ____________________________v ____________________________~ ~ Vanessa Reilly EstherEst er van Mourik CHIEF CLERK OF THE HOUSE SECRETARY OF OF REPRESENTATIVES THE SENATE APPROVED________________________________________APPROVED (Date<..Thur:scf~J5tY) andct\Z.6-th Time)2o7--fca,f _________________________________________(I: Jared S.

Polis3Octh'l GOVERNOR( OFate THEand STATE'rime) OFJared COLORADOGOVE PAGE 4-HOUSE BILL 26-1004