Concerning allowing the department of the treasury to sell unsold insurance premium tax credits to entities that are not insurance companies.
Summary
House Bill 26-1346 expands Colorado’s insurance premium tax credit program by allowing the Department of the Treasury to sell any tax credits that remain unsold after the existing application process for insurance companies. Under current law, the department could sell these credits to insurance companies with Colorado premium tax liability; this bill adds a new category of eligible purchaser: an entity that is not an insurance company but is authorized to do business in Colorado and contracts with the department to buy the remaining credits.
The bill also limits how these credits may move after purchase. A non-insurance entity that buys an unsold credit may transfer it only once, and only to an insurance company authorized to do business in Colorado that has premium tax liability. After that transfer, the insurance company generally may not transfer the credit again, except in narrow circumstances already allowed under existing merger, acquisition, or divestiture rules. The bill requires notice to the department for any transfer or assumption of the credit and leaves the existing claiming schedule unchanged.
Impact
The bill amends Colorado Revised Statutes sections 24-36-402 and 24-36-404 to broaden the definition of “qualified taxpayer” and to create a new transfer pathway for unsold insurance premium tax credits. Its practical effect is to give the Department of the Treasury more flexibility to place unused credits in the market, while preserving the credits’ ultimate use against insurance premium tax liability. The bill affects entities doing business in Colorado, insurance companies with premium tax liability, and the department’s administration of the credit program.
Sentiment
The available context suggests the bill moved forward without recorded opposition in the provided materials. It passed through the House and Senate Finance committees and was ultimately signed by the Governor, which indicates general support for the measure. The bill’s structure also suggests a policy goal of improving utilization of tax credits rather than changing the underlying tax burden on insurers.
Contention
The main policy issue is whether non-insurance entities should be allowed to participate in the purchase of insurance premium tax credits at all. Supporters likely view the change as a way to reduce the amount of credits that go unused and to improve market efficiency, while limiting downstream transfers to insurers to preserve the credits’ connection to premium tax liability. Potential concerns would center on whether expanding eligible purchasers could complicate administration or create secondary-market behavior, but no specific objections or recorded controversy appear in the provided committee or vote history.