(1) As used in this section, unless the context otherwise requires:
(a) (I) "Actual cost incurred" means the actual cost paid by the purchaser for a new or used truck or clean fuel refrigerated trailer, conversion of a truck or clean fuel refrigerated trailer, idling reduction technologies, or aerodynamic technologies, minus any credits, grants, or rebates, including federal credits, grants, or rebates for which the purchaser is eligible, but excluding the credit specified in this section.
(II) For purposes of a lease, "actual cost incurred" means the total of payments contracted in the lease for the truck minus:
Any security deposit included in the total of payments;
The rent charge included in the total of payments;
Any sales tax included in the total of payments;
Any titling and registration fees included in the total of payments;
Any disposition fee included in the total of payments;
Any administrative fee or any other fee that does not reflect the value of the truckincluded in the total of payments; and
Any credits, grants, or rebates, including federal credits, grants, or rebates for whichthe lessee or lessor is eligible, but excluding the credit specified in this section.
"Aerodynamic technologies" means a device on the United States environmental protection agency's smartway verified technology list that minimizes drag and improves air flow over a truck and trailer; except that "aerodynamic technologies" do not include tires.
"Alternative fuel" has the meaning set forth in section 24-30-1104 (2)(c)(III)(A).
"Battery capacity" means the quantity of electricity that a battery is capable of storing, expressed in kilowatt hours, as measured from a one hundred percent state of charge to a zero percent state of charge.
"Bus" means a motor vehicle with a minimum seating capacity of thirty-three, including the driver.
"Category 4" means original equipment manufacturer trucks that are equipped to operate on compressed natural gas or on liquefied petroleum gas. For purposes of this paragraph (f), "operate on compressed natural gas or on liquefied petroleum gas" means a truck that operates exclusively on compressed natural gas or on liquefied petroleum gas, or a bi-fuel truck with a multi-fuel engine capable of running on either compressed natural gas or traditional fuel, or on either liquefied petroleum gas or traditional fuel, or a dual-fuel truck with a multi-fuel engine capable of running on both compressed natural gas and traditional fuel, or on both liquefied petroleum gas and traditional fuel.
"Category 4 A" means compressed natural gas or liquefied petroleum gas conversions certified by the United States environmental protection agency. For purposes of this paragraph (g), "compressed natural gas or liquefied petroleum gas conversions" means a conversion to a truck that operates exclusively on compressed natural gas or on liquefied petroleum gas, or a bi-fuel truck with a multi-fuel engine capable of running on either compressed natural gas or traditional fuel, or on either liquefied petroleum gas or traditional fuel, or a dual-fuel truck with a multi-fuel engine capable of running on both compressed natural gas and traditional fuel, or on both liquefied petroleum gas and traditional fuel.
"Category 4 B" means original equipment manufacturer trucks that are equipped tooperate on liquified natural gas. For purposes of this subsection (1)(h), "operate on liquified natural gas" means a truck that operates exclusively on liquified natural gas, or a bi-fuel truck with a multi-fuel engine capable of running on either liquified natural gas or traditional fuel, or a dual-fuel truck with a multi-fuel engine capable of running on both liquified natural gas and traditional fuel.
"Category 4 C" means liquefied natural gas conversions certified by the United Statesenvironmental protection agency. For purposes of this subsection (1)(i), "liquefied natural gas conversions" means a conversion to a truck that operates exclusively on liquefied natural gas, or a bi-fuel truck with a multi-fuel engine capable of running on either liquefied natural gas or traditional fuel, or a dual-fuel truck with a multi-fuel engine capable of running on both liquified natural gas and traditional fuel.
"Category 5" means the installation of any idling reduction technologies on or in atruck.
"Category 6" means the installation of any aerodynamic technologies on or in a truck.
"Category 7" means an original equipment manufacturer electric truck and plug-inhybrid electric truck.
"Category 7 A" means a conversion of a truck to an electric truck or a plug-in hybridelectric truck.
"Category 8" means a clean fuel refrigerated trailer.
"Category 8 A" means a conversion of a refrigerated trailer to a clean fuel refrigerated trailer.
"Category 9" means a hydraulic hybrid truck.
"Clean fuel refrigerated trailer" means a trailer capable of being pulled by a truckwith a gross vehicle weight rating greater than fourteen thousand pounds, with a power unit and fuel storage used for climate control that:
(I) (A) Is installed on the trailer by the original equipment manufacturer; or
(B) Is installed on the trailer through a conversion certified by the United States environmental protection agency; and
(II) Operates on either compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, or electricity, or any combination thereof.
(r) "Electric truck" or "plug-in hybrid electric truck" means a truck that:
(I) Has a gross vehicle weight rating that exceeds eight thousand five hundred pounds; (II) Has a maximum speed capability of at least fifty-five miles per hour; and (III) Is propelled to a significant extent by:
An electric motor that draws electricity from a battery that has a capacity of not lessthan four kilowatt hours and is capable of being recharged from an external source of electricity; or
Power derived from one or more cells which convert chemical energy directly intoelectricity by combining oxygen with hydrogen fuel which is stored on board the vehicle in any form and may or may not require reformation prior to use.
(r.5) "Financing entity" means the entity that finances the purchase or lease of a category 4, category 4 A, category 4 B, category 4 C, category 7, category 7 A, or category 9 vehicle eligible for a credit allowed by this section.
"Gross vehicle weight rating" or "GVWR" has the same meaning as set forth in section 42-2-402 (6), C.R.S.
"Heavy-duty truck" means a truck with a gross vehicle weight rating greater thantwenty-six thousand pounds.
"Hybrid truck" means a truck with a hybrid propulsion system that operates on bothelectricity and an alternative fuel or traditional fuel.
"Hydraulic hybrid truck" means the conversion of a truck with a gross vehicle weightrating of more than fourteen thousand pounds to a truck with a hybrid propulsion system that operates on both pressurized fluid and either compressed natural gas, liquified natural gas, liquified petroleum gas, hydrogen, electricity, or a traditional fuel; except that the converted hydraulic hybrid truck must increase the fuel economy of the original truck.
"Idling reduction technologies" means idling reduction devices or advanced insulation, as those terms are defined in section 4053 of the internal revenue code, as amended, that are exempt from federal excise tax pursuant to said section 4053.
"Light-duty electric truck" means an electric truck with a gross vehicle weight ratingless than or equal to ten thousand pounds but does not include a light-duty passenger motor vehicle.
"Light-duty passenger motor vehicle" means a private passenger motor vehicle, including vans, capable of seating twelve passengers or less; except that the term does not include motor homes as defined in section 42-1-102 (57), C.R.S., or motor vehicles designed to travel on three or fewer wheels in contact with the ground.
"Light-duty truck" means a truck with a gross vehicle weight rating less than or equalto fourteen thousand pounds but does not include a light-duty passenger motor vehicle.
"Medium-duty electric truck" means an electric truck with a gross vehicle weightrating greater than ten thousand pounds and up to twenty-six thousand pounds.
"Medium-duty truck" means a truck with a gross vehicle weight rating greater thanfourteen thousand pounds and up to twenty-six thousand pounds.
(bb.3) "Purchaser" means the buyer or the lessee of a category 4, category 4 A, category 4 B, category 4 C, category 7, category 7 A, or category 9 vehicle, but does not include the state or any political subdivision of the state. For tax years commencing on or after January 1, 2017, a lessee seeking to claim a credit allowed in this section must enter into a lease with a term of not less than two years.
"Traditional fuel" means a petroleum-based motor fuel commonly used on the highways of the state in the year 2008.
"Trailer" has the same meaning as in section 42-1-102 (105), C.R.S.
(I) "Truck", for tax years commencing prior to January 1, 2017, has the same meaning as in section 42-1-102 (108), C.R.S., includes a hybrid truck, a light-duty passenger motor vehicle, and a bus, has a maximum speed capability of at least fifty-five miles per hour, is licensed or subject to licensing for operation upon the highways of the state, and is either:
Titled and registered in the state; or
Registered under the international registration plan and base plated in the state.
(II) "Truck", for tax years commencing on or after January 1, 2017, has the same meaning as in section 42-1-102 (108), C.R.S., and includes a hybrid truck, a light-duty passenger motor vehicle, and a bus, has a maximum speed capability of at least fifty-five miles per hour, is licensed or subject to licensing for operation upon the highways of the state, is new, not used, unless the truck is being converted, and is either:
Titled and registered in the state; or
Registered under the international registration plan and base plated in the state.
(2) Category 4. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2017, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (2) of the actual cost incurred by the taxpayer during the tax year for each purchase or lease of a category 4 truck, not to exceed the amount set forth in paragraph (b) of this subsection (2). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the purchase or lease of a category 4 truck must occur on or after July 1, 2014, but before January 1, 2015.
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(2.3) Category 4 purchase. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article in an amount set forth in paragraph (b) of this subsection (2.3) for each purchase of a category 4 truck during the tax year.
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(2.5) Category 4 lease. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article in an amount set forth in paragraph (b) of this subsection (2.5) for each lease of a category 4 truck during the tax year.
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(3) Category 4 A. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2017, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (3) of the actual cost incurred by the taxpayer during the tax year for the conversion of a category 4 A truck, not to exceed the amount set forth in paragraph (b) of this subsection (3). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the conversion of a category 4 A truck must occur on or after July 1, 2014, but before January 1, 2015.
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(3.5) Category 4 A. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article an amount set forth in paragraph (b) of this subsection (3.5) for the conversion of a category 4 A truck during the tax year.
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(4) Category 4 B. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2017, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (4) of the actual cost incurred by the taxpayer during the tax year for each purchase or lease of a category 4 B truck, not to exceed the amount set forth in paragraph (b) of this subsection (4). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the purchase or lease of a category 4 B truck must occur on or after July 1, 2014, but before January 1, 2015.
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(4.3) Category 4 B purchase. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article an amount set forth in paragraph (b) of this subsection (4.3) for each purchase of a category 4 B truck during the tax year.
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(4.5) Category 4 B lease. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article an amount set forth in paragraph (b) of this subsection (4.5) for each lease of a category 4 B truck during the tax year.
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(5) Category 4 C. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2017, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (5) of the actual cost incurred by the taxpayer during the tax year for the conversion of a category 4 C truck, not to exceed the amount set forth in paragraph (b) of this subsection (5). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the conversion of a category 4 C truck must occur on or after July 1, 2014, but before January 1, 2015.
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(5.5) Category 4 C. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article in the amount set forth in paragraph (b) of this subsection (5.5) for the conversion of a category 4 C truck during the tax year.
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Category 5. With respect to the income tax years commencing on or after January 1, 2015, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article of twenty-five percent of the actual cost incurred by the taxpayer during a tax year for category 5, not to exceed six thousand dollars.
Category 6. With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article of twenty-five percent of the actual cost incurred by the taxpayer during a tax year for category 6, not to exceed six thousand dollars for each installed device and not to exceed fifty thousand dollars during a tax year for the installation of multiple devices. For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the installation must occur on or after July 1, 2014, but before January 1, 2015.
Category 7. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2017, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (8) of the actual cost incurred by the taxpayer during the tax year for each purchase or lease of a category 7 truck, not to exceed the amount set forth in paragraph (b) of this subsection (8). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the purchase or lease of a category 7 truck must occur on or after July 1, 2014, but before January 1, 2015.
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(8.3) Category 7 purchase. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2026, there is allowed to any person a credit against the tax imposed by this article 22 in an amount set forth in subsection (8.3)(b) of this section for each purchase of a category 7 truck during the tax year.
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(8.5) Category 7 lease. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2026, there is allowed to any person a credit against the tax imposed by this article 22 in an amount set forth in subsection (8.5)(b) of this section for each lease of a category 7 truck during the tax year.
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(9) Category 7 A. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2017, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (9) of the actual cost incurred by the taxpayer during the tax year for the conversion of a category 7 A truck, not to exceed the amount set forth in paragraph (b) of this subsection (9). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the conversion of a category 7 A truck must occur on or after July 1, 2014, but before January 1, 2015.
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(9.5) Category 7 A. (a) Except as provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article in an amount set forth in paragraph (b) of this subsection (9.5) for the conversion of a category 7 A truck during the tax year.
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(10) Category 8. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (10) of the actual cost incurred by the taxpayer during the tax year for each purchase or lease of a category 8 trailer, not to exceed the amount set forth in paragraph (b) of this subsection (10). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the purchase or lease of a category 8 trailer must occur on or after July 1, 2014, but before January 1, 2015.
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Category 8 A. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (11) of the actual cost incurred by the taxpayer during the tax year for the conversion of a refrigerated trailer to a category 8 A trailer, not to exceed the amount set forth in paragraph (b) of this subsection (11). For purposes of the income tax year commencing on or after January 1, 2014, but before January 1, 2015, the conversion of a refrigerated trailer to a category 8 A trailer must occur on or after July 1, 2014, but before January 1, 2015. (b) PLACE PDF INSERT HERE
(11.5) Category 9. (a) With respect to the income tax years commencing on or after January 1, 2014, but before January 1, 2017, there is allowed to any person a credit against the tax imposed by this article as a percentage set forth in paragraph (b) of this subsection (11.5) of the actual cost incurred by the taxpayer during the tax year for the conversion of a category 9 truck, not to exceed the amount set forth in paragraph (b) of this subsection (11.5).
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(11.6) Category 9. (a) Except as otherwise provided in subsection (14) of this section, with respect to the income tax years commencing on or after January 1, 2017, but before January 1, 2022, there is allowed to any person a credit against the tax imposed by this article in an amount set forth in paragraph (b) of this subsection (11.6) for the conversion of a category 9 truck during the tax year.
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A taxpayer claiming the credit authorized by this section shall not claim the creditin an amount that exceeds the incremental cost of the actual cost incurred for the category 4, 4 A, 4 B, 4 C, 7, or 7 A truck or motor vehicle over the manufacturer's suggested retail price of a comparable traditional fuel truck or light-duty passenger motor vehicle.
If a credit authorized in this section exceeds the income tax due on the income ofthe taxpayer for the taxable year, the excess credit may not be carried forward and must be refunded to the taxpayer.
(13.5) (a) A purchaser may assign the tax credit allowed in this section for the purchase or lease of a category 4, category 4 A, category 4 B, category 4 C, category 7, category 7 A, or category 9 vehicle completed on or after January 1, 2017, to a financing entity as follows:
The assignment to the financing entity must be completed at the time of purchase orlease by entering into an election statement as set forth in paragraph (c) of this subsection (13.5);
The purchaser must title and register the vehicle in the state or register the vehicleunder the international registration plan and base plate the vehicle in the state as required by state law;
The purchaser must assign the tax credit to the financing entity and forfeit the rightto claim the tax credit on the purchaser's tax return in exchange for good and valuable consideration; and
The financing entity shall compensate the purchaser for the full nominal value ofthe tax credit; except that the financing entity may collect an administrative fee not to exceed one hundred fifty dollars for processing the assignment. The compensation paid to the purchaser is considered a refund of state taxes and is not income.
Notwithstanding section 39-21-108 (3), if a purchaser assigns the tax credit to a financing entity pursuant to this subsection (13.5), the financing entity receives the full amount of the tax credit that the purchaser is allowed in this section. Any unpaid balance or unpaid debt of the purchaser may not be credited from the amount of the tax credit allowed in this section.
To complete the tax credit assignment, the purchaser and the financing entity mustenter into an election statement that must:
Identify the vehicle identification number of the category 4, category 4 A, category 4 B, category 4 C, category 7, category 7 A, or category 9 vehicle for which a credit is allowed in this section; and
Affirm that the requirements specified in paragraph (a) of this subsection (13.5) weremet.
The financing entity may authorize an agent or a designee to sign the election statement on its behalf.
The financing entity shall electronically submit a report containing the informationcontained in the election statement described in paragraph (c) of this subsection (13.5) to the department of revenue within thirty days of the purchase or lease of a category 4, category 4 A, category 4 B, category 4 C, category 7, category 7 A, or category 9 vehicle in such a form and in such a manner as required by the department.
The financing entity shall also file the election statement described in paragraph (c) of this subsection (13.5) with the original tax return for the taxable year in which the category 4, category 4 A, category 4 B, category 4 C, category 7, category 7 A, or category 9 vehicle is purchased or leased.
The department of revenue, in consultation with the Colorado energy office createdin section 24-38.5-101, C.R.S., shall develop a model report and election statement no later than December 1, 2016.
(14) (a) During the calendar year ending December 31, 2018, the Colorado energy office created in section 24-38.5-101, C.R.S., shall determine whether category 4, 4 A, 4 B, 4 C, 7, 7 A, or 9 medium- or heavy-duty trucks generate life-cycle emissions materially greater than comparable medium- or heavy-duty trucks using traditional fuel. Such a life-cycle analysis must include the direct emissions regulated by the United States environmental protection agency or by the department of public health and environment that are associated with producing, transporting, and using the alternative or traditional fuels. The Colorado energy office shall consider the likely adoption of future technology at each stage of the life-cycle.
In making the determinations described in paragraph (a) of this subsection (14), theColorado energy office shall consider public input, any analysis or reports prepared by the department of public health and environment, other states, or the United States environmental protection agency, and any peer-reviewed studies conducted in the United States that evaluate similar matters.
In the event that category 4, 4 A, 4 B, 4 C, 7, 7 A, or 9 medium- or heavy-duty trucksare shown to generate life-cycle emissions materially greater than comparable traditional fuel trucks, then the Colorado energy office shall notify the department of revenue that no tax credit specified in this section is available for such trucks for the income tax years commencing on or after January 1, 2019, but before January 1, 2022; except that the Colorado energy office may determine if a particular category 4, 4 A, 4 B, 4 C, 7, 7 A, or 9 truck model or engine does not generate life-cycle emissions materially greater than a comparable traditional fuel truck model or engine and is thus allowed a credit for a given income tax year, or the Colorado energy office may allow a credit if the taxpayer can demonstrate that the taxpayer has a long-term fuel contract for his or her category 4, 4 A, 4 B, 4 C, 7, 7 A, or 9 truck from a green fuel provider, such that the life-cycle emissions from such truck are not materially greater than the emissions of a comparable traditional fuel truck. For purposes of this paragraph (c), "green fuel provider" means the alternative fuel is produced and delivered by providers that have adopted best practices for low life-cycle emissions. On or before January 1, 2019, and on or before each January 1 thereafter through January 1, 2021, the Colorado energy office and the department of revenue shall, through their respective websites, specify which category 4, 4 A, 4 B, 4 C, 7, 7 A, or 9 medium- or heavy-duty trucks are not allowed a credit for a given income tax year.
No more than one tax credit shall be granted pursuant to this section and sections39-22-516.5 and 39-22-516.7 for any individual motor vehicle or truck.
With respect to tax years commencing on or after January 1, 2017, the taxpayerclaiming a credit allowed in this section shall provide the department of revenue with, and the department shall commence tracking, the vehicle identification number of the motor vehicle or truck for which a credit is claimed as allowed in this section.
Making the purchaser aware of the income tax credit allowed in this section orhelping the purchaser assign the income tax credit to a financing entity as allowed in this section does not rise to the level of providing the purchaser with unauthorized tax advice.
This section is repealed, effective December 31, 2030.
Source: L. 2014: Entire section added, (HB 14-1326), ch. 357, p. 1664, § 2, effective June 6. L. 2016: (1)(r.5), (1)(bb.3), (2.3), (2.5), (3.5), (4.3), (4.5), (5.5), (8.3), (8.5), (9.5), (11.6), (13.5), (17), and (18) added and (1)(ee), (2), (3), (4), (5), (8), (9), (11.5), and (16) amended, (HB 16-1332), ch. 237, p. 960, § 2, effective June 6. L. 2019: (1)(h), (1)(i), (1)(r)(III), (8.3), (8.5), and (18) amended, (HB 19-1159), ch. 386, p. 3445, § 3, effective August 2. L. 2020: (15) amended, (HB 20-1402), ch. 216, p. 1058, § 68, effective June 30; (1)(c) amended, (HB 201167), ch. 56, p. 192, § 4, effective September 14.
Cross references: (1) For the legislative declaration in HB 14-1326, see section 1 of chapter 357, Session Laws of Colorado 2014.
(2) For the legislative declaration in HB 19-1159, see section 1 of chapter 386, Session Laws of Colorado 2019.