Budget & Taxes (Revenue)

The act allows a board of county commissioners and the governing body of a municipality to sell and dispose of property owned by the county or municipality, as applicable, to provide for affordable housing and allows a municipality to enter into a long-term rental or lease agreement for the development of affordable housing.     The act allows for the approval of a mutijurisdictional housing authority at a biennial local election instead of only during a general election or an election held on the first Tuesday in November of an odd-numbered year. The ballot question about establishing the authority may be combined with a question about a tax, impact fee, multiple-fiscal year debt, or other financial obligation.     The act allows a board of county commissioners to use ad valorem tax revenue for housing authorities, housing programs, and workforce housing.     The act entitles an entity subject to income tax to which a middle-income housing tax credit is transferred by a governmental entity or quasi-governmental entity to claim the credit without owning an interest in a qualified project.     The sale and use of construction materials by contractors is exempt from taxation if the materials are used by the state in its governmental capacity only. The act provides that 'governmental capacity' includes the construction of workforce housing projects undertaken by counties.(Note: This summary applies to this bill as enacted.)

The act creates the 'Transit Investment Area Act' to facilitate the financing of transit and rail station infrastructure. Specifically, the act:Allows a local government and a transit agency to jointly undertake a transit investment project. To finance the project, the local government may apply to the Colorado economic development commission (commission) to designate a transit investment area and an approved financing entity;Authorizes the approved financing entity, which may be a newly created transit investment authority, a county revitalization authority, a metropolitan district, or an urban renewal authority, to receive state sales tax increment revenue. This revenue consists of the state sales tax collected in the designated area above a base amount, plus an additional 20% to account for out-of-area deliveries.Permits the financing entity to issue bonds and use the state sales tax increment revenue to finance eligible improvements related to the transit project;Prohibits the financing entity from using the state sales tax increment revenue to acquire property through eminent domain;Requires projects to comply with specified hiring, apprenticeship, and workforce standards;Caps the commission's approval authority at no more than 3 transit investment projects in any calendar year and no more than 6 in total and caps the total state sales tax increment revenue dedicated to all projects at $75 million per fiscal year; andAuthorizes the commission to revoke project approval if substantial work does not commence within 5 years and requires financing entities to submit annual reports and independent financial audits.     The act requires the Colorado office of economic development, in consultation with the department of local affairs and the department of transportation, to publish a transit and housing investment zone map on or before October 30, 2026.     The act creates the Colorado affordable housing in transit and housing investment zones tax credit (tax credit). The tax credit is administered in the same manner as the Colorado affordable housing in transit-oriented communities income tax credit; except that the tax credit is awarded in connection with housing projects in transit and housing zones. The act authorizes the Colorado Housing and Finance Authority to allocate up to $8,333,333 in tax credits each calendar year beginning in the 2027 calendar year through the 2033 calendar year.     For the 2026-27 state fiscal year, the act appropriates $213,349 to the office of the governor for use by economic development programs.(Note: This summary applies to this bill as enacted.)