Colorado House passes HB26-1419 TABOR clawback 41-21 after rejecting Republican referendum amendments

DENVER — The Colorado House on Thursday passed HB26-1419 by a vote of 41 to 21 with three excused, sending the bill to the Senate after rejecting Republican amendments that would have referred its FY24-25 Taxpayer’s Bill of Rights over-refund clawback to voters at the November 2026 election.

The bill, sponsored by Reps. Kyle Brown of Louisville and Emily Sirota of Denver in the House and Sens. Judy Amabile and Jeff Bridges in the Senate, directs the Office of the State Controller, in consultation with the Office of State Planning and Budgeting and the Department of Revenue, to recalculate the state’s 2024-25 fiscal year TABOR over-refund to account for revenue reductions caused by the federal One Big Beautiful Bill Act. Up to one-half of that recalculated over-refund could then offset future TABOR refunds in any single fiscal year beginning with FY26-27, per the reengrossed bill text approved on third reading.

The all-Democrat sponsor list extended on third reading to Reps. Jennifer Bacon, Andrew Boesenecker, Mandy Lindsay, Lesley Smith, Rebekah Stewart, Steven Woodrow, and Yara Zokaie, who joined as co-sponsors after the bill cleared its second reading on April 28.

What the bill does

HB26-1419 amends Section 24-77-103.7 of the Colorado Revised Statutes to insert a new subsection (4.5) creating a contingent recalculation mechanism. If, in September 2026, the state controller certifies that FY25-26 revenues did not exceed the constitutional state fiscal year spending limit, the bill directs the controller to determine, before November 16, 2026, the difference between the FY24-25 TABOR refund actually owed under the state’s Annual Comprehensive Financial Report and the amount that would have been required if the federal tax change had been reflected in FY24-25 accruals. That difference is the “over-refund” the bill authorizes the state to keep.

The legislative declaration in the reengrossed bill states that H.R. 1 of the 119th Congress, Pub. L. 119-21, “had a significantly negative impact on Colorado’s financial outlook” and was signed into law on July 4, 2025, four days after the close of state fiscal year 2024-25. Because Colorado’s tax collections are tied to the federal tax code and OBBBA reduced 2025 income tax liability, the state collected less in FY24-25 than the certified TABOR surplus reflected. The bill finds that, had FY24-25 accruals been updated to reflect OBBBA, “state fiscal year 2024-25 state fiscal year spending did not exceed the constitutional limitation on state fiscal year spending.” Section 3 appropriates $18,021 in FY26-27 to the Office of the State Auditor to implement the act, and Section 4 attaches a safety clause.

The dollar figure being recovered traces to a Polis administration request to retain $306.1 million across the FY26-27 and FY27-28 budgets, Marianne Goodland of Colorado Politics reported on April 15. The Joint Budget Committee adopted half of that amount, $153 million, into its 2026-27 balancing plan after rejecting a staff recommendation that warned of legal exposure. JBC staff wrote in a February 20 memo that keeping the funds would not be legal and that the committee should weigh the potential legal risks of treating the gap as an over-refund, Goodland reported. The JBC voted to keep the money anyway.

The referendum amendments that lost

Three Republican floor amendments to HB26-1419 came up at the bill’s second reading on April 28. The bill page Amendments table records all three as Lost:

• Amendment L.008 by Rep. Chris Richardson would have stricken the bill’s effective-date language and substituted a new Section 3 referring the act to voters at the November 3, 2026 election. The replacement language would have placed on the ballot the question, “Shall there be a change to the Colorado Revised Statutes that creates new law concerning the over-refund amount for state fiscal year 2024-25 of state revenues in excess of the state fiscal year spending limit under section 20 of article X of the state constitution?”
• Amendment L.002 by Rep. Richardson would have stricken the legislative declaration in Section 1.
• Amendment L.003 by Rep. Richardson would have rewritten parts of the legislative declaration in Section 1 to substitute findings that generally accepted accounting principles do not allow revenue changes to be accrued to a fiscal year when the relevant law was not in effect during that fiscal year, and that the FY24-25 spending certification was therefore accurate under current law.

Rep. Ken DeGraaf then moved Amendment H.001 “to reverse the action taken by the Committee in not adopting the following Richardson amendment, (L.008) to HB26-1419, to show that said amendment passed and that HB26-1419, as amended, passed.” The motion lost in the Committee of the Whole 24 to 39 with two excused.

A fourth floor amendment, L.007 by Rep. Sirota, did pass at second reading. It added the September 2026 controller-certification trigger and changed the over-refund determination deadline to November 16, 2026 from December 1. That language appears in the reengrossed bill.

The bill was laid over on third reading April 29 and passed unamended on April 30 by 41 to 21, with three excused.

CUT’s position

The Colorado Union of Taxpayers, where Kim Monson serves as president, voted no on HB26-1419. CUT board member Dave Evans told The Kim Monson Show on Thursday that the organization sees the recalculation as a backdoor tax increase rather than an accounting correction.

“This is an ex post facto style tax increase,” Evans said on the broadcast. “Revenue decreases resulting from the reduction of federal tax under OBB is problematic only because of the reckless overspending by this legislature.”

Reading from CUT’s response to the bill, Evans said federal tax reductions under OBBBA “are beneficial to taxpayers so that they have more dollars to save, invest, and spend, and to the entire state through greater consumer spending,” and that reducing the constitutionally required refund cancels out those benefits. He said CUT concludes “there is no over-refund. The actual amount of taxpayers’ money is determined mathematically and is not subject to the terminology that the legislature applies.”

On the constitutional question, Evans pointed to Article X, Section 20 of the Colorado Constitution, the section voters approved as TABOR in 1992. “Withholding tax refunds is not permissible except by approval by a voter referendum under Article 20 of the state constitution,” he said. Evans added that the bill, taken together with HB26-1221 and HB26-1222, “might actually cause tax increases for some taxpayers, specifically businesses.”

Evans said CUT board members credit Reps. Richardson and DeGraaf for trying to put the question to voters. “We need to give thanks for that to Representatives Chris Richardson and Ken DeGraaf, who put that in,” he said. “So they may actually be preventing an apostasy against the state constitution.” Evans was describing the bill as it stood earlier in the week. By the time the show aired Thursday morning, both the L.008 amendment and the H.001 motion to reverse its rejection had failed, and the bill was poised for a third-reading vote without a referendum question.

What happens next

HB26-1419 now moves to the Senate, where Sens. Amabile of Boulder and Bridges of Greenwood Village are listed as prime sponsors. The bill carries a safety clause, which under Colorado constitutional law makes the act take effect on the governor’s signature and shields it from a citizen referendum petition. That structural fact is one reason the L.008 amendment mattered. With the bill referred to voters by the legislature itself, voters would have decided the question at the ballot. Without it, any challenge to the constitutionality of withholding the refund will have to be brought in court.

A separate Polis administration provision retaining the same $306.1 million is already embedded in the proposed FY26-27 state budget, Goodland reported. JBC staff flagged the legality concern in February. The JBC chose to use the funds anyway, splitting the keep across two budget years.

If the Senate passes HB26-1419 in its current form and the governor signs it, the September 2026 controller certification will determine whether the recalculation mechanism is triggered. The maximum amount the state may keep in any single fiscal year is one-half of the calculated over-refund, beginning with FY26-27.