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SB 25-173

Revenue Classification Taxpayers Bill of Rights

2025 Regular Session Introduced by Jennifer Bacon and 28 co-sponsors

Expands TABOR exemptions by classifying certain state penalties and sales as damage awards or property sales, lowering TABOR refunds and freeing General Fund money.

Governor Signed
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Bill Summary · SB 25-173

SB 25-173 — Revenue Classification (Taxpayers Bill of Rights)

Status: Governor signed (effective on signature — June 4, 2025)
Introduced: February 20, 2025
Statute amended: C.R.S. 24-77-102 (definitions of “damage award” and “property sale”)

Main purpose

Clarify and broaden the statutory definitions used to implement Colorado’s TABOR (Article X, Section 20), so that specified state collections (certain fines/penalties and specified sales/transfers of rights) are treated as TABOR‑exempt “damage awards” or “property sales.” The change affects how state fiscal year spending and TABOR refund obligations are calculated.

Key provisions

  • Amends the statutory definition of “damage award” (C.R.S. 24‑77‑102(2)) to include, for state fiscal years beginning on or after July 1, 2024, specified monetary penalties and fines collected by state agencies:

    • Civil monetary penalties assessed by HCPF against nursing facilities (section 25.5‑6‑205).
    • Civil penalties imposed by the Division of Administration of CDPHE under water‑quality law (section 25‑8‑608).
    • Monetary fines/penalties collected by CDPHE and deposited in the Community Impact Cash Fund (sections 25‑7‑115, 25‑7‑122, 25‑7‑123 / 25‑7‑129).
    • Penalties imposed by the Energy and Carbon Management Commission (section 34‑60‑121(1)).
    • Penalties collected by the Division of Labor Standards and Statistics (section 8‑1‑114).

  • Amends the definition of “property sale” (C.R.S. 24‑77‑102(11)) to expressly include transfers of rights in tangible or intangible property (excluding leasehold interests) from the state to another party, and explicitly lists example categories that qualify, including:

    • Merchandise sales at the History Colorado Center and other state historical society museums;
    • Sales of supplies tied to agricultural inspections, pesticide inspections, and wildfire equipment repair;
    • Sales related to the Correctional Education Program and the Department of Labor’s Business Enterprise Program;
    • Non‑concession sales at the Colorado State Fair;
    • Wine sales for promotional purposes by the Colorado Wine Industry Development Board.

  • Expressly preserves prior inclusions under preexisting definitions (i.e., previously classified damage awards/property sales remain included).

Who is affected

  • State agencies that collect the identified penalties/fines or operate the listed sales programs (HCPF, CDPHE, ECMC, CDLE, History Colorado, Dept. of Agriculture, Dept. of Corrections programs, Wine Industry Development Board, State Fair operations).
  • State budgeting/accounting (Office of the State Controller) — minimal additional accounting workload.
  • TABOR calculation and taxpayers: changes the amount of revenue classified as exempt from TABOR, which alters the state's TABOR refund obligation and General Fund availability.
  • Potentially local governments indirectly through property tax reimbursement mechanics (see fiscal impacts).

Fiscal impact and timing

  • Legislative Council Staff final estimate (based on the March 2025 OSPB forecast): reclassifying these revenues reduces revenue subject to TABOR by approximately $15.4 million in FY 2024‑25 and about $15.3 million in FY 2025‑26 and FY 2026‑27.
  • Effect: decreases the state TABOR refund obligation by roughly those amounts, which increases General Fund amounts available to spend or save (since refunds are paid from the General Fund).
  • Under certain forecast assumptions, the bill could necessitate a $15.4 million General Fund expenditure in FY 2025‑26 to fully fund property‑tax reimbursements to local governments; under the March 2025 OSPB forecast selected by the JBC, that expenditure is not required.
  • No appropriation required; minimal additional state workload (Office of the State Controller).

Procedural/timeline highlights

  • Introduced in Senate (2/20/2025); passed both chambers with amendments (Senate and House actions March–April 2025); sent to Governor on 5/2/2025; Governor signed 6/4/2025. Applies to state fiscal years commencing on or after July 1, 2024.

Effect on TABOR practice

The act clarifies statutory language to make explicit that certain collections are to be treated as constitutionally exempt categories (damage awards or property sales) when calculating state fiscal year spending and TABOR refunds.

Compiled from official sources — confirm details with the bill’s official record.

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