Code of Colorado Regulations
1501 - Office of the Governor
1501 - Office of Economic Development and International Trade
8 CCR 1501-3 - ISSUANCE OF PREMIUM TAX CREDITS RELATING TO COVERCOLORADO CONTRIBUTIONS
Current through Register Vol. 47, No. 5, March 10, 2024
STATEMENT OF BASIS AND STATUTORY AUTHORITY
These rules implement the premium tax credits for contributions to CoverColorado pursuant to 10-8-534, a new section added to Part 5 of article 8 of title 10 of the Colorado Revised Statutes.
This program was created by the Colorado State Legislature during the 2004 Legislative Session. The primary purpose of this program is to issue a dollar for dollar premium tax credit to insurance companies that make cash contributions to CoverColorado thereby providing an incentive for such contributions to be made. Any contributions received by CoverColorado as a result of this tax credit program will assist in funding operating costs for the CoverColorado health insurance program. Insurance companies that make cash contributions pursuant to this program will be eligible to receive a dollar for dollar Tax Credit Certificate that can be used to offset premium taxes due to the State of Colorado. The Office is authorized to issue Tax Credit Certificates in an aggregate amount of up to $5,000,000 (five million dollars) per year pursuant to this program or if S.B. 04-106 is declared to be unconstitutional by a final judgment that invalidates the tax credits enacted by such bill, to issue up to $10,000,000 (ten million dollars) of tax credits.
PURPOSE OF REGULATION
This regulation implements the process by which premium tax credits for contributions to CoverColorado shall be allocated pursuant to 10-8-534, C.R.S. in which the Statute requires that the Colorado Office of Economic Development promulgate such regulation. This regulation clarifies certain definitions and provides for new definitions as needed. It describes the procedure by which an insurance company submits an irrevocable offer to make a qualifying, cash contribution to CoverColorado in exchange for a premium tax credit. It details the process for an insurance company making such an offer, the process for applying to receive a tax credit certificate, including the deadlines and dates relating to such processes.
By promulgating this regulation, the Colorado Office of Economic Development will increase public access to information, public participation in the formulation of administrative policy and procedures, and increase public accountability of the Colorado Office of Economic Development.
DEFINITIONS
The following language provides definitions for terms provided under 10-8-534, C.R.S. that were utilized in the Statute for this program and provides new definitions, both of which are necessary for the implementation of the program by the Office of Economic Development. The following words and terms shall have the meanings provided herein, unless the context clearly indicates otherwise.
"Allocation Notice" is issued by the Office and lists the amount of proposed tax credits an insurance company is allocated and the Contribution Deadline.
"Applicant" is an insurance company that submits an Application for Tax Certificate to the Office on or before the Application Due Date, but no earlier than the date of an Allocation Notice or a Waiting List Notice.
"Application" means an Application for Tax Certificate.
"Application Due Date" means on or before November 1, 2004 and on or before the first working day of November for years 2005 through 2013.
"Application for Tax Certificate" means an original paper copy form as prescribed by the Office and submitted by an insurance company on or before the Application Due Date to the Office.
"Board" means the CoverColorado Board of Directors.
"Contribution Deadline" means the date by which an insurance company must make the cash contribution to CoverColorado. This date is indicated on the Allocation Notice. The first Contribution Deadline shall be on or before November 15, 2005. Subsequent Contribution Deadlines shall be on or before November 15th (or the first working day to occur after November 15th) of the subsequent years.
"Cure Period" means the fifteen (15) days that an insurance company has to cure its default and make the required cash contribution to CoverColorado. Such Cure Period ends fifteen (15) days from the postmark date of the Default Notice.
"Day" means a calendar day as in seven days in a week.
"Default Notice" is sent by the Office within three (3) working days following the Contribution Deadline to any insurance company that fails to make the required cash contribution when due.
"Document" means Document of Offers and Proposed Allocations.
"Document of Offers and Proposed Allocations" means a written list of all Irrevocable Offers, Proposed Allocations, and Waiting List.
"Irrevocable Offer" is a commitment to contribute cash to CoverColorado made by an insurance company. Such offer is contingent only upon the Office's issuance of an Allocation Notice to the insurance company.
"Offer" means an Irrevocable Offer.
"Offer Acceptance Period" means from September 13, 2004 through October 12, 2004 and the second Monday in September through the first working day to occur thirty (30) calendar days from the second Monday in September for years 2005 through 2013.
"Office" is the Office of Economic Development created in section 24-48.5-101, C.R.S.
"Proposed Allocation" means the amount of tax credits proposed to be allocated to an insurance company by the Office.
"Qualified Taxpayer" means an insurance company that has met all the requirements of 10-8-534(3), C.R.S. as determined by the Office.
"Reallocation Contribution Deadline" means the date by which an insurance company must make the cash contribution to CoverColorado. This date is indicated on the Reallocation Notice. The first Reallocation Contribution Deadline shall be on or before December 12, 2005.
"Reallocation Notice" is issued by the Office and indicates the amount of proposed tax credits that have been reallocated to an insurance company. Such Reallocation Notice shall also indicate the Contribution Deadline relating to the reallocated tax credits.
"Statute" means 10-8-534, C.R.S.
"Tax Credit Certificate" is a certificate issued by the Office to a Qualified Taxpayer indicating the amount of tax credits that the insurance company may claim and the tax year to which the credit may be applied.
"Waiting List" is the status of an insurance company that submitted an Irrevocable Offer, but did not receive a tax credit allocation because the tax credits were oversubscribed.
"Waiting List Notice" is issued by the Office and indicates that the insurance company is on the Waiting List to receive a tax credit allocation.
"Working Days" means a business day in which the Colorado Office of Economic Development is open for normal business. A business day shall begin at 8:30AM Mountain Standard Time or Mountain Daylight Time, as applicable, and shall end at 5:00PM Mountain Standard Time or Mountain Daylight Time, as applicable.
COVERCOLORADO TAX CREDITS 10-8-534, C.R.S.
Submission of an Irrevocable Offer
An insurance company seeking to receive a dollar-for-dollar premium tax credit in exchange for a cash contribution to CoverColorado, shall submit an Irrevocable Offer to make a cash contribution to CoverColorado. Such Irrevocable Offer is contingent only upon the Office's issuance of an Allocation Notice to the insurance company. The Irrevocable Offer shall be made on a specific form to be prescribed by the Office.
Included on the Irrevocable Offer form shall be:
1) the address, phone number and contact information for the insurance company;
2) the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company;
3) a description of the insurance company's legal structure;
4) the amount of cash that the insurance company commits to contribute to CoverColorado;
5) a statement estimating the premium tax liability the insurance company will owe to the State of Colorado for the tax year in which the cash contribution to CoverColorado shall be made; and
6) a statement self-certifying that the insurance company is in good standing within the State of Colorado.
The Irrevocable Offer shall be signed by an officer of the company with the authority to sign such a document. Appropriate documentation from the insurance company evidencing the authority of the person signing shall be submitted to the Office with the Irrevocable Offer. For example, if the insurance company were a corporation, a fully executed board resolution (authorizing the President of the company to sign binding documents and stating who the President is) would be acceptable signature authorization documentation.
1) An original paper copy of the Irrevocable Offer shall be filed with the Office. No other form (such as e-mail or facsimile) of the Irrevocable Offer will be accepted.
2) The Irrevocable Offer form may be obtained directly from the Office in paper copy format, by e-mail with an attached Word file or by accessing the Office's website at www.state.co.us/oed under the "Business Development and Finance" section and under the heading "CoverColorado Premium Tax Credits".
3) All insurance companies shall fully complete, execute, and file such Irrevocable Offer with the Office during the Offer Acceptance Period. The Offer Acceptance Period shall begin no earlier than 8:30AM on September 13, 2004 and shall end on October 12, 2004 no later than 5:00PM Mountain Standard Time or Mountain Daylight Time. Offers submitted prior to the beginning of the Offer Acceptance Period (whether by hand delivery or otherwise) shall be considered received on September 13, 2004. Offers submitted after 5:00PM on the last day of the Offer Acceptance Period may be accepted by the Office at its discretion.
4) An offer shall be deemed filed with the Office when the Office receives one original Irrevocable Offer including originally executed page(s). Offers shall either be hand delivered with signature of receipt required, delivered by courier or expedited mail service, or sent via certified mail with signature of receipt required. The Offer must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202. The Office shall stamp all Offers with the date and time of receipt.
5) Pertaining to years 2005 through 2013, Irrevocable Offers shall be accepted in the same manner as described above. All insurance companies shall fully complete, execute, and file an Offer during the Offer Acceptance Period which shall begin no earlier than 8:30 AM on the second Monday in September and shall end no later than 5:00 PM on the first working day to occur thirty (30) calendar days from the second Monday in September Mountain Standard Time or Mountain Daylight Time, as applicable. Offers submitted prior to the beginning of the Offer Acceptance Period (whether by hand delivery or otherwise) for that year, shall considered received on the first day of the Offer Acceptance Period. Offers submitted after 5:00PM on the last day of the Offer Acceptance Period for that year may be accepted by the Office at its discretion.
Review of Irrevocable Offer
The Office shall review all Irrevocable Offers submitted for completeness. The Office shall notify the insurance company in writing of any missing information. If the Office has requested additional information, the Offer shall be treated as having been received on the date originally submitted only if the insurance company submits the additional information within three (3) working days after the date of the Office=s written request. If all information is not received within the time frame stated herein, the Offer shall be deemed withdrawn and the Office shall have no obligation to provide additional notices to the insurance company.
Determination of Proposed Allocation
Within three (3) working days after the last day of the Offer Acceptance Period, the Office shall determine a Proposed Allocation based on the date order that an insurance company made an Irrevocable Offer until the Office has allocated up to five (5) million dollars of tax credits per year, or if S.B. 04-106 is declared to be unconstitutional by a final judgment that invalidates the tax credits enacted by such bill, until the Office has allocated up to ten (10) million dollars of tax credits. All Offers submitted on the same day shall be considered equally regardless of the time of day the Offer is submitted.
If the total of the Irrevocable Offers received on the first day is less than the maximum amount of tax credits available for allocation, then the Office shall make Proposed Allocations in the full amount of the Offers submitted. The Office shall then determine the amount of tax credits available on the next day by subtracting all Proposed Allocations from the first day from the maximum tax credits to be allocated. This process shall continue until the Proposed Allocations total the maximum amount of tax credits to be allocated.
If the total of the Irrevocable Offers received on any day is greater than the amount of tax credits available for allocation on that day, then the Office shall make Proposed Allocations on a pro rata basis. The pro rata allocation shall be based upon the relation the company's Offer has to the total amount of Offers received on that day times the amount of tax credits available for allocation on that day.
The following example illustrates how the proposed tax credits would be allocated if the total tax credits available were five (5) million dollars and if the following Irrevocable Offers were submitted:
|
Company Name |
Date/Time Received |
Offer |
Cumulative Offers |
|
|
Company A |
Sept. 13th |
10:00A.M. |
$1,000,000 |
$1,000,000 |
|
Company B |
Sept. 13th |
11:00A.M. |
$1,000,000 |
$2,000,000 |
|
Company C |
Sept. 13th |
4:30P.M. |
$1,000,000 |
$3,000,000 |
|
Company D |
Sept. 15th |
9:30A.M. |
$ 500,000 |
$3,500,000 |
|
Company E |
Sept. 22nd |
11:30A.M. |
$1,000,000 |
$4,500,000 |
|
Company F |
Sept. 22nd |
4:00P.M. |
$2,000,000 |
$6,500,000 |
|
Company G |
Oct. 12th |
9:00A.M. |
$1,000,000 |
$7,500,000 |
On September 13th, the total of the Irrevocable Offers received is less than the amount of tax credits available for allocation, so the Office shall make Proposed Allocations in the full amount of the Offers submitted: Company A - $1,000,000; Company B - $1,000,000; Company C - $1,000,000. The Office will then determine the amount of tax credits available on the next day by subtracting all Proposed Allocations from the first day from the maximum tax credits to be allocated $5,000,000 - $3,000,000 = $2,000,000. On September 15th, only one Offer for $500,000 was received. Since the Offer is less than the amount of tax credits available for allocation of $2,000,000, the full $500,000 is the Proposed Allocation for Company D. The amount of tax credits available on the next day would be $2,000,000 - $500,000 = $1,500,000. The next day that Offers were received was September 22nd. On September 22nd, Offers totaling $3,000,000 were received. Because the total of the Irrevocable Offers received of $3,000,000 is greater than the amount of tax credits available for allocation of $1,500,000, the Office shall make Proposed Allocations on a pro rata basis as follows:
|
Company E |
$1,000,000 / $3,000,000 x $1,500,000 = |
$ 500,000 |
|
Company F |
$2,000,000 / $3,000,000 x $1,500,000 = |
$1,000,000 |
|
Total Credits Allocated |
$1,500,000 |
On October 12th, an Offer was received in the amount of $1,000,000 from Company G. Because the amount of tax credits available for allocation on that day is zero, the amount of Proposed Allocation for Company G is zero. If the Proposed Allocation for a company is zero, the company shall be placed on the Waiting List.
The Office reserves the right to round up or down within $1.00 at its discretion in allocating tax credits.
Acceptance of Offers, Proposed Allocations, and Waiting List
Within three (3) working days after the last day of the Offer Acceptance Period, the Office shall compile a Document of Offers and Proposed Allocations and shall hand deliver such Document to the Board for review and acceptance. The Document shall contain the name of the insurance company making the Offer, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date and time the Offer was received, the amount of the Offer, the Proposed Allocation Amount, and the Waiting List of companies not receiving an allocation. Within three (3) working days after the Office has submitted the Document to the Board, the Board shall hand deliver such Document marked "Accepted" to the Office.
By accepting the Document of Offers and Proposed Allocations the Board acknowledges that the Office may reallocate any tax credits that become available to those companies that appear on the Waiting List as described herein.
Allocation Notice
Within two (2) working days after the Office receives the "Accepted" Document of Offers and Proposed Allocations, the Office shall send an Allocation Notice by certified mail with signature of receipt required to each insurance company to which the Office proposes to issue a Tax Credit Certificate.
The Allocation Notice issued by the Office shall specify:
1) the address, phone number and contact information for the insurance company;
2) the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company;
3) the amount of cash contribution that the insurance company committed to contribute to CoverColorado in its Irrevocable Offer;
4) that the CoverColorado Board has reviewed and accepted the offer;
5) the amount of proposed tax credits the Office has allocated to the insurance company;
6) the amount of contribution that the insurance company must make to CoverColorado in order to receive such tax credits (equal to the amount of tax credits allocated to the company);
7) the Contribution Deadline date by which the insurance company must make the cash contribution to CoverColorado; and
8) the default and cure provisions of 10-8-534(4) (a), C.R.S. The Allocation Notice shall also give specific instruction on how the insurance company is to make its cash contribution to CoverColorado and shall require the submission of contribution documentation to the Office.
Waiting List Notification
Insurance companies that submitted an Offer, but did not receive a Proposed Allocation, shall be placed on the Waiting List. The Office shall send a Waiting List Notice to such companies within two (2) working days after the Office receives the "Accepted" Document of Offers and Proposed Allocations from the Board.
Application for a Tax Credit Certificate
On or before November 1, 2004, and on or before each Application Due Date thereafter through 2013, any insurance company that received an Allocation Notice or a Waiting List Notice from the Office during that calendar year shall be considered eligible and shall submit an Application for Tax Certificate to the Office.
If an eligible insurance company does not submit an Application for Tax Certificate on or before the Application Due Date, then the Office reserves the right to reallocate the tax credits originally allocated to the insurance company.
The Application shall be on a form prescribed by the Office and shall provide information necessary to determine if the Applicant will be qualified to receive a tax credit certificate pursuant to 10-8-534(3), C.R.S.
1) An original paper copy of the Application shall be filed with the Office. No other form (such as e-mail or facsimile) of the Application will be accepted.
2) The Application form may be obtained directly from the Office in paper copy format, by e-mail with an attached Word file or by accessing the Office's website at www.state.co.us/oed under the "Business Development and Finance" section and under the heading "CoverColorado Premium Tax Credits".
3) All eligible insurance companies shall fully complete, execute, and file such Application with the Office no later than 5:00PM Mountain Standard Time or Mountain Daylight Time, as applicable, on the Application Due Date. Applications submitted after 5:00PM, shall not be considered submitted and will be returned to the sender.
4) An Application shall be deemed filed with the Office when the Office receives one original Application including originally executed page(s). Applications shall either be hand delivered with signature of receipt required, delivered by courier or expedited mail service, or sent via certified mail with signature of receipt required. The Application must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202. The Office shall stamp all Applications with the date and time of receipt.
5) Pertaining to years 2005 through 2013, Applications shall be accepted in the same manner as described above. Such Applications shall be due to the Office on the first working day of November (the Application Due Date) of the respective year.
The Office shall review all Applications submitted for completeness. Within two (2) working days of the submission of Applications, the Office shall notify the insurance company in writing of any missing information. If the Office has requested additional information, the Application shall be treated as having been received on the date originally submitted only if the insurance company submits the additional information within three (3) working days after the date of the Office=s written request. If all information is not received within the time frame stated herein, the Application shall be deemed withdrawn and the Office shall have no obligation to provide additional notices to the insurance company.
Notification of Cash Contribution Received
On the second working day following the date by which the cash contributions were due to CoverColorado (the Contribution Deadline), CoverColorado shall hand deliver a notification of cash contributions received to the Office. The notification shall be in list form and include the name of the insurance company, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date the contribution was made, and the amount of contribution.
On the day received, the Office shall review the notification of contributions received. Any insurance company that is not listed, but that received an Allocation Notice from the Office, or any insurance company that is listed, but did not make the amount of cash contribution as required on the Allocation Notice shall be considered in default per 10-8-534(4) (b) (I), C.R.S. Within one working day of receipt of the notification list, the Office shall send a written notice of default by certified mail with signature of receipt required to any insurance company in default. Such notice shall outline that the insurance company has fifteen (15) days to cure the defect and that the fifteen days shall begin on the date the notice is postmarked (for example, November 18, 2005).
On the first working day following the fifteen day cure period (for example, December 5, 2005), CoverColorado shall hand deliver a notification of cash contributions received to the Office. The notification shall include the name of the insurance company, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date the contribution was made, and the amount of contribution.
If the cash contribution is not received by the end of the fifteenth day, the insurance company's Offer shall be deemed withdrawn, the insurance company shall immediately forfeit any right to claim the tax credits originally allocated it, and the Office shall have no obligation to provide additional notices to the insurance company.
Determination of Qualified Applicants
The Office shall determine if an insurance company is qualified to receive a Tax Credit Certificate for that year. In order to establish qualification, the Office must determine if:
1) the insurance company has made a timely and Irrevocable Offer to the Board to make a specified contribution of cash to CoverColorado;
2) the insurance company's Offer was accepted by the Board;
3) the insurance company received an Allocation Notice from the Office; and
4) the insurance company made the timely contribution of cash to CoverColorado when due equal to the amount of tax credit allocation the company received.
Issuance of Tax Credit Certificates
After the Office has determined that the Applicant is qualified to receive a tax credit, the Office shall issue a Tax Credit Certificate in a format prescribed by the Office. The Tax Credit Certificate shall be sent via certified mail with signature of receipt required to the Qualified Taxpayer before the last day of the tax year for which the credit applies.
Such Tax Credit Certificate shall specify 1) the amount of money that the insurance company may claim as a tax credit (such amount shall be equal to the cash contribution to CoverColorado); 2) the tax year to which the tax credit shall be applied; and 3) the calendar year in which the tax credit may first be used.
If the Office determines that an Applicant is not qualified to receive a tax credit, the Office shall send a written notification via certified mail with signature of receipt required before the last day of the tax year for which the credit would have applied.
Reallocation of Tax Credits Available due to Undersubscription, Default or Withdrawal
During any Offer Acceptance Period, if the Office does not receive Irrevocable Offers totaling the full amount of the tax credits available for allocation, the Office reserves the right to allocate the amount of available tax credits (tax credits not allocated).
If there are tax credits that become available due to an Applicant not qualifying to receive a tax credit or due to an Application being withdrawn, the tax credits shall be reallocated to companies on the Waiting List on the second (2nd) working day immediately following the end of the default Cure Period (for example, December 2, 2005). On the day of reallocation, the Office shall send a Reallocation Notice to such companies by certified mail with signature of receipt required with a Reallocation Contribution Deadline of seven (7) days from the date of the Reallocation Notice (for example, December 12, 2005). On the first working day following the Reallocation Contribution Deadline for reallocated tax credits, CoverColorado shall hand deliver a notification of contributions received to the Office. The notification shall include the name of the insurance company, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date the contribution was made, and the amount of contribution.
The Office shall use the same procedure outlined previously to determine if an insurance company receiving reallocated tax credits is qualified to receive a Tax Credit Certificate. The Office shall use the same procedure outlined previously to issue a Tax Credit Certificate to such a qualified insurance company and to issue a written notification to an insurance company that is not qualified to receive a tax credit.
If there are tax credits that become available due to an undersubscription of Offers, due to an Applicant not qualifying to receive a tax credit, or due to an Application being withdrawn, and if there are no companies on the Waiting List, then the Office reserves the right to reallocate the amount of available tax credits (tax credits not allocated).
The procedures outlined in this rule for the submission of information and documents relating to this program shall be applied to the reallocation of tax credits.
Use of the Premium Tax Credits
An insurance company may claim the credit by submitting the Tax Credit Certificate issued by the Office along with its taxpayer return. The credit allowed by this program shall be an amount equal to one hundred percent of the total amount of the insurance company's qualifying contribution to CoverColorado made during the tax year for which the credit is claimed.
If the amount of the credit allowed is greater than the amount of premium taxes due in the tax year for which the credit is being claimed, the credit not used as an offset may be carried forward for up to ten years. Any credit remaining after the ten-year period shall not be refunded or credited to the taxpayer.
Notification To The Commissioner Of Insurance
On or before January 1 following the respective Application deadline defined above, the Office shall certify to the Commissioner of Insurance the insurance companies who are qualified to receive premium tax credits pursuant to this program, the amount of premium tax credit each taxpayer is eligible to claim, and the calendar year in which the tax credit may be used.
Due to the "estimated" nature of quarterly tax payments, premium tax credits may only be used on an annual basis against actual premium tax liabilities. Premium tax credits may first be used in January of 2006 with regard to the actual tax liability for tax year 2005.
Annual Notification of Program Due Dates
The Office shall annually issue an information sheet that will indicate all applicable dates for submitting Irrevocable Offers, for making cash contributions to CoverColorado, and for submitting Applications for Tax Certificates.
APPEALS, DUE PROCESS AND RIGHT TO A HEARING
Any person adversely affected by a decision of the Office in regard to this program is entitled to a hearing pursuant to the Administrative Procedure Act 24-4-105(2), C.R.S.
MATERIAL DETERMINATION
In all cases, the Office reserves the right to determine the materiality of a requested item.
