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Legislative Year: 2024 Change
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Bill Detail: SB24-190

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Title Rail & Coal Transition Community Economic Measures
Status Senate Committee on Finance Refer Amended to Appropriations (04/09/2024)
Bill Subjects
  • Fiscal Policy & Taxes
  • State Government
  • Transportation & Motor Vehicles
House Sponsors J. McCluskie (D)
M. Lukens (D)
Senate Sponsors D. Roberts (D)
House Committee
Senate Committee Finance
Date Introduced 03/28/2024
Summary

A coal transition community is a Colorado municipality, county,
or region where a Colorado coal-fueled electrical power generating plant
that was in operation at any time in 2017, a Colorado coal mine that was
actively producing at any time in 2017, or a center for the manufacturing
or transportation supply chain of such a plant or coal mine was or is
located.
Section 2 of the bill expands the duties of the rural opportunity
office in relation to coal transition communities by requiring the rural
opportunity office, in coordination with county commissioners, municipal
officials, local chambers of commerce and economic development
organizations, institutions of higher education, private industry, and any
local organizations dedicated to increased rail usage, to pursue
opportunities for new, early state, and existing businesses and support
business and industry development and economic diversification in
coordination with workforce training opportunities and existing state and
federal programs that are designed for coal transition communities.
Sections 3 and 4 concern the Moffat tunnel. Section 3 prohibits
contracts for the right to use the Moffat tunnel for more than 99 years.
Section 4 allows the department to convey or transfer ownership of all
tangible property, real and personal, or any interest of that property
owned by the Moffat tunnel improvement district for less than fair market
value if the department finds that such a conveyance and transfer is in the
public interest.
Section 5 creates 2 income tax credits.
The first income tax credit created in section 5 is a fully
refundable income tax credit (freight tax credit). The freight tax credit
incentivizes taxpayers to incur costs in the use of freight rail
transportation of freight that either originates or terminates at a business
located in a coal transition community and on a rail line in this state that
the department of transportation has determined is at risk of inactivity or
abandonment due to a lack of demand resulting from coal transition
(relevant costs). The Colorado office of economic development (office)
administers the freight tax credit and may annually reserve up to $5
million worth of tax credits on or after January 1, 2025, but prior to
January 1, 2036. A taxpayer must apply to the office for the reservation
of the freight tax credit. After the office reserves the freight tax credit for
a taxpayer, the office may issue the taxpayer a tax credit certificate in an
amount equal to 75% of the relevant costs both stated in the taxpayer's tax
credit application and incurred by the taxpayer.
The second income tax credit created in section 5 is also a fully
refundable income tax credit (operator tax credit). The operator tax credit
incentivizes railroad operators to maintain rail line access to coal
transition communities. For income tax years 2027 through 2037, a
common carrier engaged in the transportation of freight on a rail line
designated by the department of transportation (department) as a
qualified rail line is allowed a credit in an amount stated in a tax credit
certificate issued by the department. The amount in a tax credit certificate
must equal up to 75% of the direct operating and capital improvements
necessary to maintain or improve a qualified rail line as stated in the
taxpayer's tax credit application and incurred by the taxpayer. The
department shall designate a rail line as a qualified rail line if the
department determines that the rail line is at risk of inactivity or
abandonment and is covered by an access agreement for passenger rail
access. A taxpayer must apply to the department for the issuance of an
operator tax credit certificate. The department may annually issue up to
$5 million worth of operator tax credits. The operator tax credit is subject
to recapture if the taxpayer does not meet one or more of the service
criteria specified in an access agreement for the qualified rail line.
Current law establishes a number of criteria for any municipality,
county, or group of contiguous municipalities or counties to propose an
area of such municipality, county, or group of municipalities or counties
to be designated as an enterprise zone. Section 6 allows an area that is
both a rural area and a tier one transition community to be proposed as an
enterprise zone.
A business in an enhanced rural enterprise zone can earn a tax
credit for hiring new employees. Section 7 designates the portion of any
county that is a coal transition community as an enhanced rural enterprise
zone.

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