by Ed DeCecco
What is your purpose? It’s a big question; one that can confound even the greatest of thinkers. And it is a question that the attorney drafting your bill might be asking you soon. No, I’m not talking about your purpose in life — though that is a good thing to have. I’m talking about the requirement that any bill that creates a tax expenditure must include a statement of the intended purpose in a legislative declaration. Before I tell you a little more about this new requirement, let me first anticipate and answer your obvious follow-up question. A “tax expenditure” is “a tax provision that provides a gross or taxable income definition, deduction, exemption, credit, or rate for certain persons, types of income, transactions, or property that results in reduced tax revenue.” So, if you have a bill that reduces the amount of taxes that the state or a local government collects, it is likely a tax expenditure, and you should continue reading. (And if you don’t have such a bill, then have a nice day 🙂
In the past, you probably had discussions with the OLLS attorney about the purpose of your tax expenditure, as that information helps us make sure that we are correctly drafting your bill. You will still have those discussions, but now we will be using that information to officially describe this purpose and include it in a statutory or non-statutory legislative declaration because section 39-21-304, Colorado Revised Statutes, which was enacted as part of Senate Bill 11-184, requires that “any bill that creates a new tax expenditure or extends an expiring tax expenditure shall include a legislative declaration stating the intended purpose of the tax expenditure.”
But wait, this purpose won’t just be dropped in some dusty law books to never be heard from again. In some instances, it will breath new life every other year as a part of the tax profile and expenditure report that the Department of Revenue will complete. Alas, if the tax is not included in the report, the purpose won’t make it either, and it will be just in the law books — though hopefully yours are not dusty.
So remember, if you have a bill that reduces taxes and your OLLS attorney asks “What is your purpose?”, he or she is not trying to cause you existential angst. The attorney is just following up on a law that you, as part of the 68th General Assembly, enacted last year. Of course, if you are opposed to answering this question, we can always create a discrete statutory exception for you. But I’ll have more on that topic in my future blog posting entitled “But I Don’t Want to!”