2023 Colorado Revised Statutes › Title 39 - TAXATION (§§ 39-1-101 — 39-37-301) › SPECIFIC TAXES (§§ 39-20-101 — 39-37-301) › ENTERPRISE ZONES (§§ 39-30-101 — 39-30.5-108) › Article 30 - URBAN AND RURAL ENTERPRISE ZONE ACT (§§ 39-30-101 — 39-30-112) › Section 39-30-103 - [Effective 8/7/2024] Zones established - review - termination

(1)
(a)
Any municipality, county, or group of contiguous municipalities or counties may propose an area of such municipality, county, or group of municipalities or counties to be designated as an enterprise zone if the area has a population of no more than one hundred fifteen thousand persons as calculated pursuant to subsection (1.3) of this section, or one hundred fifty thousand persons as calculated pursuant to subsection (1.3) of this section if the area is a rural area, and meets at least one of the following additional criteria:
(I)
An unemployment rate at least twenty-five percent above the state average for the most recent period of twelve consecutive months for which data is available from the United States census bureau or the department of local affairs;
(II)
A population growth rate less than twenty-five percent of the state average rate for the most recent five-year period for which data are available from the United States census bureau or the department of local affairs, or, if such data is not available for any five-year period, for the most recent period of not less than five nor more than ten years for which such data is available; or
(III)
A per capita income less than seventy-five percent of the state average for the most recent period for which data is available from the United States census bureau or the department of local affairs.
(b)
Notwithstanding subsection (1)(a) of this section, on or after July 1, 2024, but before January 1, 2034, any municipality, county, or group of contiguous municipalities or counties may propose an area of such municipality, county, or group of municipalities or counties to be designated as an enterprise zone, so long as that area is a rural area designated as a tier one transition community as defined in section 8-83-502 (10).
(1.3)
For the purposes of this article, the population of an enterprise zone shall be calculated using data from the United States census bureau or the department of local affairs at the county, municipal, or block levels. Such calculations that require the use of block level data shall include the entire population of each block in which the enterprise zone is located.
(1.5)
As used in this section, "rural area" means:
(a)
A county with a population of less than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census;
(b)
A municipality with a population of less than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census, that is located ten miles or more from a municipality with a population of more than fifty thousand people; or
(c)
The unincorporated part of a county located ten miles or more from a municipality with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census.
(2)
(a)
Except as provided in paragraph (c) of this subsection (2), the director of the Colorado office of economic development shall determine whether an area meets the criteria specified in subsection (1) of this section based on the most recent statistics available. Except as provided in paragraph (c) of this subsection (2), all decisions concerning the designation or termination of an enterprise zone or any portion of an enterprise zone shall be made by the Colorado economic development commission created in section
24-46-102
, C.R.S., upon the recommendations of the director of the Colorado office of economic development.
(b)
Repealed.
(c)
(I)
Commencing January 1, 2014, the director of the Colorado office of economic development and the Colorado economic development commission shall review the enterprise zone designations no less frequently than once every ten years to ensure that the existing zones continue to meet the criteria specified in subsection (1) of this section. The director and the commission may modify existing enterprise zone designations based on the review specified in this paragraph (c). If it is determined that existing enterprise zone designations need to be modified, such modification shall not be undertaken in a high unemployment period, but the director and the commission shall review the need for such modifications again as soon as the state is no longer in a high unemployment period. Any modification shall be reported to the legislative audit committee in conjunction with the annual presentation described in paragraph (b.7) of subsection (4) of this section and shall also be reported to the finance committees of the house of representatives and the senate, or any successor committees.
(II)
For purposes of this section, "high unemployment period" means a period in which the average of the seasonally adjusted U-3 unemployment rate, or successor index, for Colorado as determined by the United States secretary of labor, for the most recent three months for which data for Colorado is published, equals or exceeds eight percent.
(3)
In proposing an area for designation as an enterprise zone, the local government shall submit to the director of the Colorado office of economic development a development plan. This plan shall include information describing the following items:
(a)
The boundaries of the proposed zone;
(b)
The proposed zone's potential for business development and job creation;
(c)
How the proposed zone will support and be consistent with maintenance of an economically viable central business district;
(d)
The specific economic development objectives, to be achieved in the zone, including specific objectives that have measurable outcomes, and the measures that local government and the private sector will undertake to support those objectives;
(e)
The person or agency to be designated as administrator of the proposed zone;
(e.5)
How the specific economic development objectives of the zone that have measurable outcomes will be measured and the specific, verifiable data that will be used to measure such outcomes;
(f)
Any other pertinent information the director of the Colorado office of economic development or the Colorado economic development commission may require.
(4)
(a)
The Colorado economic development commission, after consultation with the executive directors of the department of labor and employment and the department of revenue, may approve the designation of not more than sixteen areas as enterprise zones. The commission shall designate administrative entities for enterprise zones.
(b)
The Colorado economic development commission shall work with the zone administrators of each enterprise zone to ensure that each zone has specific economic development objectives with outcomes that can be measured with specific, verifiable data. The director of the Colorado office of economic development shall require the zone administrators for each zone to submit annual documentation of efforts to improve conditions in areas designated as enterprise zones and the results of those efforts. Such annual documentation must include specific, verifiable data that can be used to measure whether the zone has achieved the specific economic development objectives for the zone that have measurable outcomes. In order for the commission to determine if the enterprise zones or portions thereof are achieving the specific economic development objectives submitted pursuant to this subsection (4)(b) or to subsection (3)(d) of this section, such annual documentation must include, but need not be limited to, the most recent statistics available for companies claiming enterprise zone tax credits on:
(I)
The number of jobs created in the enterprise zone and the North American industry classification system (NAICS) code of each company reporting the creation of jobs within the zone;
(II)
The number of jobs retained in the zone;
(III)
The average annual compensation level, including benefits, of the jobs created or retained within the zone, categorized by full time permanent, part time, temporary, and contract jobs;
(IV)
(Deleted by amendment, L. 99, p. 725, § 2, effective May 20, 1999.)
(V)
The number of employees from outside the zone transferred to a facility within the zone;
(VI)
(Deleted by amendment, L. 99, p. 725, § 2, effective May 20, 1999.)
(VII)
An analysis of capital investment in the enterprise zone, including:
(A)
The number and amount of qualified rehabilitation expenses made on rehabilitated vacant buildings;
(B)
The amount of investment in qualifying property for which tax credits were claimed pursuant to section
39-30-104
;
(VIII)
The number of employees trained and the amount of investment in job training programs pursuant to section
39-30-104 (4)
;
(IX)
The number of business facility employees for which a credit is claimed pursuant to section
39-30-105.1
;
(X)
The amount of investment tax credits claimed pursuant to section
39-30-104
and the amount of credits claimed pursuant to section
39-30-105.1
;
(XI)
Any other information reasonably required by the zone administrator, the director of the Colorado office of economic development, or the Colorado economic development commission to evaluate the effectiveness of each zone in accomplishing the specific measurable objectives of the zone.
(b.5)
In addition to the annual documentation required pursuant to paragraph (b) of this subsection (4), the director of the Colorado office of economic development shall require the zone administrators for each enterprise zone to submit, to the extent practicable, annual documentation on the most recent statistics available on:
(I)
Any change in the unemployment rate in the zone;
(II)
Any change in per capita income in the zone;
(III)
Any change in population in the zone;
(IV)
The amount of all monetary or in-kind contributions for the purpose of implementing the economic development plan for the zone and the specific purpose of the contributions as provided in section
39-30-103.5
.
(b.7)
The director of the Colorado office of economic development, or the director's designee, on behalf of the Colorado economic development commission, shall submit an annual report to the general assembly on or before November 1 of each year summarizing the annual documentation submitted by zone administrators to the director of the Colorado office of economic development each year pursuant to paragraphs (b) and (b.5) of this subsection (4). The director of the Colorado office of economic development, or the director's designee, on behalf of the commission, shall make an annual presentation to the legislative audit committee that reviews and summarizes the information in the report submitted to the general assembly pursuant to this paragraph (b.7).
(c)
(I)
(Deleted by amendment, L. 2004, p. 364, § 1, effective August 4, 2004.)
(II)
The state auditor shall submit a report to the governor and the general assembly, at the discretion of the state auditor and the legislative audit committee, evaluating the implementation of the enterprise zone program, making recommendations for statutory changes, if any, and including any other information requested by the governor or the general assembly. The evaluation shall be based upon the data included in the annual reports submitted by the director of the Colorado office of economic development on behalf of the Colorado economic development commission to the general assembly pursuant to paragraph (b.7) of this subsection (4) and objective verifiable data submitted by the enterprise zone administrators and maintained by the Colorado office of economic development, local governments, and enterprise zone administrators. The report shall also include information concerning the amounts of tax credits claimed and allowed under the program. For purposes of preparing the report required by this paragraph (c), the state auditor shall have access to all records and documents applicable to the program, whether maintained by the Colorado office of economic development, local governments, or enterprise zone administrators.
(c.5)
Companies claiming enterprise zone credits shall provide information reasonably required by zone administrators, the director of the Colorado office of economic development, and the Colorado economic development commission to evaluate the effectiveness of each zone in accomplishing the measurable economic development objectives to be achieved in the zone. Such information shall be considered public records as defined in section
24-72-202 (6)
, C.R.S., shall be preserved for at least five years by the zone administrator who collected the information, who shall be the custodian of such information, and shall be made available by the zone administrator for inspection by any person at reasonable times. Nothing in this paragraph (c.5) shall be construed to require the disclosure to the public of any information that reveals the amount of compensation paid to any individual employee of a company, any Colorado income tax return, or any information regarding expenditures on research and development.
(d)
Repealed.
(e)
(Deleted by amendment, L. 2008, p. 216, § 2, effective March 26, 2008.)
(5)
No later than March 1, 1997, the Colorado economic development commission created in section
24-46-102
, C.R.S., shall report to the governor and the general assembly the results of a competitive benchmarking study, performed by a private consultant with experience in evaluation of state business assistance programs in multiple states, comparing Colorado's business climate, as it affects the retention and growth of basic employers and their investment, with the business climate of other states. In addition, the study shall assess long term economic development strategies, including but not limited to encouraging primary job creation throughout Colorado. Along with the report, the commission shall provide the governor and the general assembly its recommendations for additional study or modifications to Colorado's public policy concerning the state's business climate and its recommendations concerning specific business development and job creation objectives that should be used as minimum requirements or standards for future designation of enterprise zones or portions of enterprise zones consistent with statewide economic development targets and objectives.
(6)
(a)
When the termination of an enterprise zone or portion of an enterprise zone would prevent a taxpayer from qualifying for tax benefits under this article 30 and the taxpayer can identify job creation or capital expansion activities that were planned prior to the termination announcement and that would have otherwise entitled the taxpayer to claim tax benefits under section
39-30-103.5
,
39-30-104
, or
39-30-105.1
, the enterprise zone administrator and the taxpayer shall jointly certify detailed information about such planned activities. A taxpayer who files such certification with the taxpayer's state income tax return may claim tax benefits otherwise actually earned up to the limits of such certified information for a period not to exceed the ten tax years following the year in which the enterprise zone or portion of an enterprise zone was terminated. It is the intent of this subsection (6) only to permit taxpayers to claim tax benefits on which they demonstrably relied in making business planning decisions, and, except as specifically provided in this subsection (6), nothing in this subsection (6) may be construed to authorize the commission or any enterprise zone administrator to grant tax benefits that have been repealed by the general assembly or to grant tax benefits in excess of the limits established by law.
(b)
Notwithstanding any date restriction set forth in its text, any certification that was prepared pursuant to paragraph (a) of this subsection (6) prior to June 3, 2002, that extends the right of a taxpayer to claim tax benefits for the maximum period that was allowed by law at the time the certification was prepared, and that allows the taxpayer to claim tax benefits for one or more income tax years that end on or after June 3, 2002, shall extend the right of the taxpayer to claim tax benefits for the maximum period specified in paragraph (a) of this subsection (6).
(7)
(a)
Beginning on January 1, 2012, before a taxpayer engages in any activity for which the taxpayer intends to claim an income tax credit pursuant to section
39-30-104
,
39-30-105.1
,
39-30-105.5
, or
39-30-105.6
, an authorized company official of the taxpayer's business or the taxpayer who is the owner of the business shall submit a precertification form to the enterprise zone administrator as specified in this subsection (7). A taxpayer that completes an activity prior to January 1, 2012, for which the taxpayer intends to claim an income tax credit pursuant to this article 30 shall submit to the zone administrator on or before December 31, 2012, any information related to such completed activity that is necessary to receive certification from the zone administrator that the taxpayer's business is located in the enterprise zone. Nothing in this subsection (7) may be construed to require a taxpayer to submit a precertification form to the zone administrator for activities completed prior to January 1, 2012. In connection with the precertification, the taxpayer shall be required to:
(I)
Obtain verification from the enterprise zone administrator that the taxpayer's business is located in an enterprise zone;
(II)
Certify that the taxpayer is aware of the enterprise zone income tax credits allowed pursuant to this article;
(III)
Certify that the enterprise zone income tax credits allowed pursuant to this article are a contributing factor to the start-up, expansion, or relocation of the taxpayer's business in the enterprise zone; and
(IV)
Certify that the taxpayer acknowledges that the precertification required pursuant to this section is for activities that shall commence after the date that the precertification form is executed by the enterprise zone administrator through the end of the business's then-current income tax year.
(b)
The department of revenue shall amend the current certification forms that a taxpayer is required to complete in connection with claiming an income tax credit pursuant to this article, to include a section through which the taxpayer or an authorized company official of the taxpayer's business may provide the information required pursuant to subparagraphs (II) to (IV) of paragraph (a) of this subsection (7).
(8)
(a)
Notwithstanding any other provision to the contrary, for tax years commencing on or after January 1, 2014, only a taxpayer that is engaged in a business that is legal under both state and federal law is eligible to claim a credit pursuant to this article 30, except as provided in subsection (8)(b) of this section.
(b)
For tax years commencing on or after January 1, 2025, a business that holds a valid license pursuant to article 10 of title 44 is eligible to claim a credit pursuant to this article 30.
Amended by 2024 Ch. 410,§ 14, eff. 8/7/2024, app. to acts committed on or after 8/7/2024.
Amended by 2024 Ch. 280,§ 6, eff. 8/7/2024.
Amended by 2020 Ch. 103, § 5, eff. 4/1/2020.
L. 86: Entire article added, p. 1140, § 1, effective July 1. L. 87: (4) amended, p. 1470, § 1, effective May 28. L. 89: (3)(e) R&RE, (3)(f) added, and (4) amended, p. 1521, §§ 2-4, effective June 7. L. 90: (1)(b), (2), and (4) amended, p. 1752, § 1, effective May 24. L. 96: IP(1), (3)(d), and (4) amended, and (5) and (6) added, p. 1121, § 1, effective July 1. L. 97: (4)(b)(VIII) amended, p. 1397, § 3, effective June 3. L. 99: (3)(d), (4)(b), (4)(c), (4)(d)(I), and (6) amended and (3)(e.5), (4)(b.5), (4)(b.7), and (4)(c.5) added, p. 725, §§ 1, 2, effective May 20. L. 2000: (4)(e) amended, p. 1680, § 8, effective July 1. L. 2002: (4)(d) repealed and (6) amended, pp. 1121, 1122, §§ 5, 6, effective June 3; IP(1), (4)(c)(II), (4)(c.5), and (6) amended and (1.5) added, p. 1103, § 2, effective August 7. L. 2004: (4)(b.7) and (4)(c) amended, p. 364, § 1, effective August 4. L. 2008: (2), IP(3), (3)(f), (4)(a), IP(4)(b), (4)(b)(XI), IP(4)(b.5), (4)(b.7), (4)(c)(II), (4)(c.5), and (4)(e) amended, p. 216, § 2, effective March 26; (4)(c)(II) amended, p. 115, § 1, effective August 5. L. 2010: IP(1), (4)(b)(I), and (4)(c)(II) amended and (1.3) and (7) added, (SB 10-162), ch. 1875, p. 1875, § 1, effective 1/1/2012. L. 2012: (1)(a), (1.3), (2), and IP(4)(b) amended, (HB 12-1241), ch. 1356, p. 1356, § 1, effective June 6; (4)(b.7) amended, (SB 12-166), ch. 1149, p. 1149, § 5, effective August 8. L. 2013: (2)(a) and (2)(c)(I) amended, (2)(b) repealed, and (8) added, (HB 13-1142), ch. 1049, p. 1049, §§ 3, 2, effective May 15. L. 2014: (4)(b)(IX), (4)(b)(X), (6)(a), and IP(7)(a) amended, (HB 14-1363), ch. 1273, p. 1273, § 41, effective May 31. L. 2020: IP(4)(b), (4)(b)(IX), (4)(b)(X), (6)(a), and IP(7)(a) amended, (HB 20-1166), ch. 396, p. 396, § 5, effective April 1.
(1) Amendments to subsection (6) by House Bill 02-1161 and House Bill 02-1399 were harmonized.
(2) Amendments to subsection (4)(c)(II) by Senate Bill 08-107 and House Bill 08-1305 were harmonized.
2024 Ch. 410, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
2024 Ch. 280, was passed without a safety clause. See Colo. Const. art. V, § 1(3).
This section is set out more than once due to postponed, multiple, or conflicting amendments.
For the legislative declaration in the 2013 act amending subsections (2)(a) and (2)(c)(I), repealing subsection (2)(b), and adding subsection (8), see section 1 of chapter 224, Session Laws of Colorado 2013.