CO HB1125

Creates a refundable income tax credit equal to 25% of qualified conversion expenditures for converting commercial structures to residential structures, available for tax years 2026-2035.

Requires applicants to submit an application, conversion plan, and expenditure estimate to the Colorado Office of Economic Development, which has 90 days to review and reserve credits (maximum $3 million per project, $5 million annually).

Applicants must incur at least 20% of estimated expenditures within 18 months of receiving credit reservation and place the conversion in service by December 31, 2035; tax credit equals 25% of actual expenditures.

Includes refundability provisions allowing 90% of unused credits to be refunded if credit exceeds income taxes owed, and recapture requirements if the structure fails to remain a qualified residential structure during a 15-year compliance period.

Requires annual reporting to the General Assembly on project numbers, residential units created, occupancy rates, affordability, and geographic distribution; section repeals December 31, 2041.