C.R.S. § 24-46-403: Transit investment project - application - requirements - transit investment zones cash fund.

(1) Beginning January 1, 2027, a local government, either alone or in partnership with a transit agency that has jurisdiction within a proposed transit investment area, may submit an application to the office of economic development for the approval of a transit investment project, including the:

(a) Designation of a transit investment area;

(b) Creation of a transit investment authority, as necessary; and

(c) Designation of a financing entity to receive, use, and disburse state sales tax increment revenue for eligible costs.

(2) (a) Before a local government submits an application for a transit investment project to the office of economic development pursuant to subsection (1) of this section, the local government must submit a map showing the proposed boundaries of a proposed transit investment area to the office of economic development, along with data used to estimate the state sales tax increment revenue and a calculation showing the projected baseline growth rate. The office of economic development shall verify whether the proposed transit investment area is within a transit and housing investment zone that is established in relation to a transit facility that is the subject of the transit investment project in the local government's application submitted pursuant to subsection (1) of this section, and the office of economic development shall enter into a contract with a third-party analyst to estimate the baseline growth rate for the proposed transit investment area. In estimating the baseline growth rate, the third-party analyst shall consider the growth rate for the proposed transit investment area during at least the previous ten calendar years, if available. The third-party analyst shall deliver its estimate to the office of economic development who shall provide the estimate to the office of state planning and budgeting and the commission for review.

(b) The office of state planning and budgeting shall submit to the commission a review of the third-party analyst's estimate within thirty calendar days of receipt of the estimate from the office of economic development.

(c) The commission shall take into account the estimate provided by the third-party analyst and the review provided by the office of state planning and budgeting and shall establish a baseline growth rate for use by the local government and the third-party analyst in the commission's application assumptions and by the department.

(d) The office of economic development may charge a local government a submission fee of up to seven thousand five hundred dollars per submission, and the state treasurer shall credit that fee to the transit investment zones cash fund created in subsection (6) of this section, for the costs incurred in contracting with a third-party analyst for the estimation of the baseline growth rate for the proposed transit investment area pursuant to subsection (2)(a) of this section. The office of economic development shall annually adjust for inflation or deflation the fee required pursuant to this subsection (2)(b) and shall round the adjusted amount upward or downward to the nearest hundred dollars.

(e) The local government and the third-party analyst retained pursuant to subsection (3)(j) of this section shall use the baseline growth rate determined by the commission in their assumptions and economic analyses for the purpose of calculating their estimate of the maximum annual and total cumulative dollar amounts of state sales tax increment revenue available to be pledged to the proposed transit investment project as required by subsections (3)(i) and (3)(j) of this section.

(3) A local government that submits an application pursuant to subsection (1) of this section must submit the application to the office of economic development in a form and manner to be determined by the commission. An application must include at least:

(a) Maps of the proposed project area showing both current conditions and a conceptual rendering of the proposed transit investment project in its anticipated built condition;

(b) A map showing the proposed boundaries of the proposed transit investment area;

(c) A narrative description of the proposed transit investment project, including:

(I) The location and estimated overall cost;

(II) Estimated eligible costs;

(III) The anticipated scope and phasing of eligible improvements;

(IV) The infrastructure existing or needed in connection with the proposed transit investment project; and

(V) An operations, maintenance, and capital reserve plan for the proposed transit investment project;

(d) A discussion of the application and prioritization criteria established in subsection (4) of this section and section 24-46-404 (3)(f)(II), respectively, and how the proposed transit investment project will meet these criteria. This discussion shall include an economic analysis detailing:

(I) Projected economic development including the projected real estate development, growth in commercial activity, tourism, increases in the residential population, jobs, or any other economic improvements that will increase state sales tax revenue that will be catalyzed, induced, supported, or facilitated by the proposed project in the proposed transit and investment area;

(II) Impact of the project on future state sales tax revenue in the transit investment area during and after the proposed financing term; and

(III) Any other information reasonably requested by the commission;

(e) (I) A description of the proposed financing entity; and

(II) A general description of the proposed financing entity's plan for financing the eligible costs and providing the proposed eligible improvements;

(f) If applicable, a request for authorization of a transit investment authority, which request shall include a description of the proposed transit investment authority's:

(I) Geographic boundaries;

(II) Requested powers; and

(III) Anticipated sources of revenue, if any, in addition to state sales tax increment revenue;

(g) If it is anticipated that the proposed financing entity will enter into contractual arrangements with one or more urban renewal authorities, metropolitan districts, authorities formed by intergovernmental agreement among two or more metropolitan districts, local governments, regional transportation authorities, or private parties with respect to the method of financing the eligible costs and providing the proposed eligible improvements, a general description of the contemplated contractual arrangements;

(h) If it is anticipated that the proposed eligible improvements will be constructed in phases or that financing of the eligible costs will be accomplished in phases, a description of the contemplated phases and the anticipated timing of the phases;

(i) Concerning the financing of the proposed eligible public improvements by the financing entity, the following proposed items:

(I) The financing term;

(II) The maximum annual dollar amount of state sales tax increment revenue that can be allocated to the financing entity;

(III) The total cumulative dollar amount of state sales tax increment revenue that can be allocated to the financing entity; and

(IV) Whether the state sales tax increment revenue that exceeds the projected costs of eligible costs will be spent on additional eligible costs incurred in connection with the transit investment project;

(j) Upon receipt of an application, the office of economic development shall commission a report by a third-party analyst who is an expert in the field of economic or public financial analysis calculating the annual and total cumulative dollar amounts of state sales tax increment revenue available to be pledged to the proposed transit investment project to be set by the commission pursuant to section 24-46-404 (3). The reviewing third-party analyst must be chosen through a request for proposals issued by the office of economic development to ensure an independent and thorough analysis, and the third-party analyst shall report to that office. The office of economic development shall require a local government that submits an application pursuant to subsection (1) of this section to pay the costs for the third-party analyst chosen by the office of economic development pursuant to this subsection (3)(j) to commission the report; except that, if the office of economic development determines that the payment of these costs by a local government would constitute an extreme negative financial hardship for the local government, the office of economic development may pay these costs from the transit investment zones cash fund created in subsection (6) of this section or, if there is insufficient money in the transit investment zones cash fund, the office of economic development may pay these costs from the general fund to the extent the general assembly has specifically appropriated dedicated funding which is available for this purpose; except that the office shall not pay these costs for more than two applicants in an application cycle. As part of creating the report, the third-party analyst must:

(I) Estimate the total state sales tax increment revenue during the financing term in the proposed transit investment area that the financing entity is eligible to receive;

(II) Estimate the maximum annual dollar amount of state sales tax increment revenue in the transit investment area that the financing entity is eligible to receive;

(III) Assess the application's satisfaction of the criteria described in subsection (4) of this section and section 24-46-404 (3)(f)(II);

(IV) Take into account projected economic development including the projected real estate development, growth in commercial activity, tourism, increase in the residential population, jobs, or any other economic improvements that will increase state sales tax revenue that will be catalyzed, induced, supported, or facilitated by the proposed project in the proposed transit and investment area included in the application; and

(V) Provide other relevant information required by the office of economic development or the commission;

(k) A local government that submits an application pursuant to subsection (1) of this section must share the data and assumptions it used in its application with the third-party analyst, and the analyst shall rely on the data and reasoning as it deems appropriate in the exercise of its independent judgment. An applicant that is dissatisfied with the report produced by the third-party analyst may revise its application and request that the third-party analyst revise the report.

(4) An application must demonstrate that it satisfies each of the following criteria:

(a) The proposed transit investment project is reasonably anticipated to result in a substantial increase in transit utilization;

(b) The boundaries of the proposed transit investment area are only as large as necessary to accomplish the proposed transit investment project goals;

(c) The proposed transit investment project or substantial portions of the proposed project have been identified as part of a local planning process;

(d) The costs identified pursuant to section 24-46-403 (3)(c)(II) are eligible costs;

(e) The local government that submitted the application for the proposed transit investment project has provided reliable economic data demonstrating that, in the absence of state sales tax increment revenue, the proposed project is not reasonably anticipated to be developed within the foreseeable future; and

(f) The proposed transit investment project will be carried out in a manner consistent with the hiring, apprenticeship, and workforce standards applicable to infrastructure projects that are financed by the building urgent infrastructure and leveraging dollars authority as required by section 24-117-105 (6), to the extent these standards are not inconsistent with the requirements of this part 4.

(5) The office of economic development shall provide the commission with each application received after the director's review pursuant to section 24-46-404.

(6) (a) The transit investment zones cash fund is created in the state treasury. The fund consists of submission fees collected by the office of economic development and credited to the fund pursuant to subsection (2)(b) of this section, and any other money that the general assembly may appropriate or transfer to the fund.

(b) In accordance with section 24-36-114 (1), the state treasurer shall credit all interest and income derived from the deposit and investment of money in the transit investment zones cash fund to the general fund.

(c) Subject to annual appropriation by the general assembly, the office of economic development may expend money from the fund to pay or partially pay:

(I) The cost incurred in contracting with a third-party analyst to estimate the baseline growth rate for the proposed transit investment area pursuant to subsection (2)(a) of this section; and

(II) The costs for third-party analysts as described in subsection (3)(j) of this section.