Code of Colorado Regulations — Office of the Governor

1501 Office of Economic Development and International Trade

8 CCR 1501-2 Certified Capital Companies' Program {#sec-8-ccr-1501-2 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-2}

OFFICE OF THE GOVERNOR

Office of Economic Development and International Trade CERTIFIED CAPITAL COMPANIES’ PROGRAM 8 CCR 1501-2 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________

STATEMENT OF BASIS AND STATUTORY AUTHORITY

These rules implement the Certified Capital Companies’ Program pursuant to 10-3.5-101 through 10-3.5- 110, 24-48.5-106 and 10-1-103, C.R.S. This program was created by the Colorado State Legislature with the primary purpose being to provide assistance in the formation of new businesses and the expansion of existing businesses that create jobs in the state by providing an incentive for insurance companies to invest in Certified Capital Companies. The Certified Capital Companies will then invest the funds in Colorado Businesses.

Insurance companies will invest cash in Certified Capital Companies, which are for-profit companies, which have received certification from the Colorado Office of Economic Development to do business under this program. The Certified Capital Companies will then invest in certain types of Colorado Businesses utilizing the cash they received from the insurance companies to make these investments.

Although the Colorado Statute and this regulation direct the Certified Capital Companies’ investment to certain types of Colorado Businesses, the Certified Capital Companies will retain a large amount of flexibility in the decision making process in terms of which businesses receive investment funding from this program. Once a business is determined to be generally eligible under the Statute and this

regulation, the Certified Capital Companies have final decision making authority as to whether to invest in such business. A Certified Capital Company may not make any investments in Colorado Businesses, using funds from this program, until it has received its certification from the Colorado Office of Economic Development and until investing insurance companies have received vested Premium Tax Credit Allocations in exchange for their cash investment in the Certified Capital Company.

In exchange for the insurance companies’ cash investment in Certified Capital Companies, this program authorizes the Allocation of Premium Tax Credits to insurance companies as an incentive for insurance companies to invest in Certified Capital Companies. The legislature authorized a Premium Tax Credit Allocation Pool of $100 million for this program. Additionally, the Statute further divided the Pool into a $25 million Rural Pool and a $75 million Statewide Pool. The $25 million Rural Pool shall be available for investment in Designated Rural Counties in Colorado. The $75 million Statewide Pool shall be available for investment statewide throughout Colorado. The Colorado Office of Economic Development has fully allocated all of the premium tax credits for the Program as of April 15, 2002.

PURPOSE OF REGULATION

This regulation implements the Certified Capital Companies’ Program pursuant to 10-3.5-101 through 10- 3.5-110, 24-48.5-106 and 10-1-103, C.R.S. in which the Statute requires that the Colorado Office of Economic Development promulgate such regulation. This regulation clarifies certain definitions and provides for new definitions as needed. It describes the requirements for maintaining its status as a Certified Capital Company and the process for decertification for failure to comply with certain legislative requirements. It provides a fine schedule for certain non-compliance issues. This regulation provides requirements for the insurance company’s cash investment in a Certified Capital Company. It provides for technical corrections and amendments to statutes. It describes the Premium Tax Credit Allocation Process, the methods for claiming Premium Tax Credits, and the process for transferring or selling Premium Tax Credits. It details the Distributions Review, which describes a method for calculating the internal rate of return or the 15% calculations pursuant to 103-3.5-108, C.R.S., to be conducted by the Colorado Office of Economic Development and the required reports Certified Capital Companies must file with the Colorado Office of Economic Development.

By promulgating this regulation, the Colorado Office of Economic Development will increase public access to information, public participation in the formulation of administrative policy and procedures, and increase public accountability of the Colorado Office of Economic Development.

DEFINITIONS 10-3.5-103, C.R.S.

The following language provides definitions for terms provided under 10-3.5-101 through 10-3.5-110, 24- 48.5-106 and 10-1-103, C.R.S. that were utilized in the Statute for this program and provides new definitions, both of which are necessary for the implementation of the CAPCOs’ Program by the Colorado Office of Economic Development. The following words and terms shall have the meanings provided herein, unless the context clearly indicates otherwise.

“Applicant” means one who applies to be a Certified Capital Company. Applicant can also mean proposed Certified Capital Company. If the Office approves Applicant’s request, then the Applicant’s status shall change to a Certified Capital Company.

"Business Day" is defined the same as a working day.

“CAPCO” is a Colorado Certified Capital Company certified pursuant to the Certified Capital Companies’ Program, 10-3.5-101 through 10-3.5-110, 24-48.5-106 and 10-1-103, C.R.S, and specifically pursuant to the definition provided at 10-3.5-103(4), C.R.S.

“Capitalization” shall be relevant for the purposes of initial certification pursuant to 10-3.5.-104(2)(c), C.R.S. A CAPCO shall utilize Generally Accepted Accounting Principles (“GAAP”) in recording Equity Capitalization of the CAPCO. At the time of certification, a CAPCO shall have Equity Capitalization of non-Certified Equity Capital in the amount of $500,000. CAPCOs shall maintain separate and independent records for their non-Certified Equity Capitalization as well as separate and independent records for each Specific Pool of Certified Capital (for example, the Rural Pool and the Statewide Pool as applicable to each CAPCO). Equity Capitalization used in CAPCO Distribution language of this article shall be considered Equity Capitalization from any source at any time.

“ColoradoBusiness(es)” are eligible for funding from this program if they meet the eligibility requirements stated under the definition of “Qualified Business” and/or “Qualified Rural Business” under this program’s Statute and this regulation.

“ColoradoEconomic Development Commission” (“EDC”) was legislatively created in 1987, pursuant to 24- 46-102, C.R.S. as amended, to encourage, promote and stimulate economic development in Colorado.

“Day” means a calendar day as in seven days in a week.

“DesignatedRural County” means any county, but not any city and county, in this state that, as of the effective date of this article, has a population of not more than one hundred fifty thousand people and, if the county’s population exceeds twenty thousand people, that has a growth rate that does not exceed the statewide average for the period 1990-2000 by more than twenty-five percent as defined in the two most recent decennial censuses.

(1) Population Estimates for Counties. A Designated Rural County may not have a population of more than 150,000 people as of the effective date of 10-3.5-101 through 10-3.5-110, 24-48.5-106 and 10-1-103, C.R.S., which was June 9, 2001. As of June 9, 2001, the official county population estimates used by the Colorado State Demographer’s Office within the Department of Local Affairs reflect population counts of the 2000 Census. Counties, in Colorado that had in excess of one hundred fifty thousand people on the above date and therefore are NOT “Designated Rural Counties” for the purpose of this program, are as follows with their respective populations:

Adams (363,857), Arapahoe (487,967), Boulder (291,288), Denver (554,636), Douglas (175,766), El Paso (516,929), Jefferson (527,056), Larimer (251,494), and Weld (180,936).

(2) County Population Growth. If the county’s population exceeds twenty thousand people, and its population growth rate for the period 1990-2000 exceeds the statewide average by more than twenty-five percent as defined in the most recent decennial censuses, that county will not be considered a “Designated Rural County.” The State of Colorado had a 1990 census population of 3,294,394 and a 2000 census population of 4,301,261, an increase of thirty and six-tenths percent (30.6%). A population growth rate over twenty-five percent (25%) above the statewide growth rate would equal thirty-eight and sixty-five one hundredths percent (38.65%). The following five counties meet these criteria and therefore are NOT “Designated Rural Counties” for the purpose of this program:

County 1990 Population 2000 Population Growth Rate Eagle 21,928 41,659 90.0% Fremont 32,273 46,145 43.0% Garfield 29,974 43,791 46.1% Summit 12,881 23,548 82.8% Teller 12,468 20,555 64.9% (3) City and County. No city and county may be a Designated Rural County. The following counties are cities and counties and therefore are NOT “Designated Rural Counties”: Broomfield and Denver.

(4) Designated Rural Counties. All other counties in Colorado are considered to be a “Designated Rural County” for the purposes of this program until the 2010 decennial census is issued. At that time, all “Designated Rural Counties” shall be reviewed by the Office and an amendment to the rule shall be published if the “Designated Rural Counties” change based on the Office’s review at that time.

“Director” means the Director of the Colorado Office of Economic Development.

“Distressed Urban Community” means any county or portion of a county in this state as defined by the Office.

(1) For the purpose of this program, a “Distressed Urban Community” shall be any area within the list of counties that is NOT a Designated Rural County in Paragraphs (1), (2) and (3) of the Designated Rural Counties’ definition and that has been designated as an Enterprise Zone by the Colorado Economic Development Commission pursuant to 39-30-103, C.R.S. An Enterprise Zone is an area, which has been nominated by one or more counties, municipalities, and/or cities and counties as economically distressed, and which has been designated as such by the Colorado Economic Development Commission. The specific boundaries of those zones are on record with the local Enterprise Zones Administrators within the designated Enterprise Zones in the State of Colorado.

(2) In the event that a “Distressed Urban Community” ceases to be an Enterprise Zone area as a result of a formal action by the Colorado Economic Development Commission to terminate the area's Enterprise Zone status pursuant to 39-30-103, C.R.S. an investment by a Certified Capital Company shall be considered an investment in a Qualified Business that has its Principal Business Operations located in a Distressed Urban Community if the location was in an Enterprise Zone at the time of the first investment by the Certified Capital Company in said business.

(3) In the event the Enterprise Zone Program is no longer in effect for the State of Colorado, the Office will determine appropriate criteria for consideration as a “Distressed Urban Community” for the purposes of this program and an amendment to the rule shall be published at that time.

“Distributions” has the meaning as outlined in the Statute and this regulation, except for the purposes of the internal rate of return calculations or the 15% calculations pursuant to 10-3.5-108, C.R.S. where “Distributions” shall have the meaning specifically defined within this regulation where internal rate of return calculations or the 15% calculations are described.

“Distributions Review” means the internal rate of return calculation or the 15% calculations, which the Office shall complete pursuant to 10-3.5-108, C.R.S. and which review shall be completed on an ongoing

basis and as part of the Annual Review, if needed, pursuant to 103-3.5-109, C.R.S.

“Full-time Equivalent” means an individual who generally works 2080 hours per calendar year.

“Generally Accepted Accounting Principles” (“GAAP”) means conventions, rules, and procedures that define accepted accounting practice, including broad guidelines as well as detailed procedures. The basic doctrine was set forth by the Accounting Principles Board of the American Institute of Certified Public Accountants, which was superseded in 1973 by the Financial Accounting Standards Board (“FASB”), an independent self-regulatory organization. GAAP shall be utilized by CAPCO’s in all instances unless an alternative treatment is specified in a specific situation and fully explained in writing by the Independent Certified Public Accountant.

“Headquarters or Headquartered for a CAPCO” means the chief place of business from which policies are made and orders are issued.

Each CAPCO and its managing/operating company (if applicable), receiving such certification from the Office, shall maintain a separate physical site location, contact information and contact persons from any other Certified Capital Company and its respective managing/operating company (if applicable). A CAPCO and its managing/operating company may occupy the same physical site location.

“Headquarters or Headquartered for a Qualified Business or a Qualified Rural Business” means the chief place of business from which policies are made and orders are issued.

“Immediate Family Member” means spouse, child by birth or adoption, stepchild, stepparent, parent, sibling, legal guardian, significant other or lawful representative.

“Indebtedness” has the meaning as outlined in the Statute and this regulation, except for the purposes of the internal rate of return calculations or the 15% calculations pursuant to 10-3.5-108, C.R.S. where “Indebtedness” shall have the meaning specifically defined within this regulation where internal rate of return calculations or the 15% calculations are described. Qualified Debt instruments (including payment of principal and interest) shall be included in the definition of Indebtedness and shall be included in the IRR calculation but not in the 15% calculations as specifically stated in the Statute.

Repayments of debt from an unrelated, unaffiliated entity/third party in an arms-length transaction at market rates (“Indebtedness exception”) shall not be defined as Indebtedness or included as a Distribution for the purpose of the IRR calculation or the 15% calculations. Such payments shall be considered solely as an outflow of cash.

On a case-by-case basis, the Office will consider extending the “Indebtedness exception” to repayments of debt to equity holders (except for Qualified Debt instruments) and related/affiliated entities, will consider not defining the principal amount loaned as Indebtedness and will consider not including the principal amount loaned as a Distribution for the purpose of the IRR calculation or the 15% calculation.

However as approved on a case-by-case basis, interest and other forms of return (above and beyond the principal amount loaned) will not be defined as Indebtedness but shall be defined as a Distribution and shall be included in the IRR calculation or the 15% calculation for these type of transactions. A CAPCO shall not convert equity to debt and use the exceptions provided in this paragraph—meaning that any such conversions shall be treated as equity for the purposes of the IRR or the 15% calculations.

“Indirectly” means deviating from a direct line or relationship, not going straight to the point, not directly aimed at or achieved, as well as any other indirect means or acts. Indirectly may involve one or more intermediaries.

“Investment of Cash” means a transaction, which in substance and in form, results in a CAPCO disbursement of cash. Examples of transactions excluded from this definition are circular transactions as determined by the Office; accruals of principal, interest, royalty or other income; letters of credit; loan guarantees; and loan collection expenses or legal fees incurred by a CAPCO in protecting its collateral interest in an investment.

Investment of Cash further means the commitment of cash in a business in order to earn a financial return. Investing in a business is different and distinct from traditional lending to a business. Investing in a business involves a higher level of risk in exchange for a return exceeding that, which is typical in the banking or lending industry.

An Investment of Cash by a CAPCO shall have a minimum term of 1 year unless determined otherwise by the Office. This provision is not intended to preclude: 1) a business from repaying the investment, at its sole discretion, on an earlier date or 2) a CAPCO from exercising any of its rights as a creditor.

In regards to revolving lines of credit, the highest outstanding balance that has been borrowed by the Qualified Business on any one date within the term of the revolver will be the amount of Qualified Investment dollars that are credited towards the requirements within this program.

“Material” means having significant importance as determined by the Office.

“Premium Tax Credit Allocation Pool” means the Premium Tax Credit Allocation Pool of $100 million, which has been authorized by the State of Colorado’s Legislature. The Premium Tax Credit Allocation Pool of $100 million dollars shall be referred to as the Pool. Additionally, the Pool has been further divided into a $25 million Rural Pool and a $75 million Statewide Pool and shall be known generally as Specific Pools. The $25 million Rural Pool, shall be available for investment in Designated Rural Counties in Colorado. The $75 million Statewide Pool, shall be available for investment statewide throughout Colorado. The Colorado Office of Economic Development has fully allocated all of the premium tax credits for the Program as of April 15, 2002.

“Principal Office” means the office designated by an entity or person as its principal office in the document most recently delivered by the principal office to the secretary of state for filing and filed by the secretary of state providing such information, including any statement of change of principal office. If the secretary of state does not maintain such information, then the entity or person shall provide such designating information in a format required by the Office.

Each CAPCO and its managing/operating company (if applicable), receiving such certification from the Office, shall maintain a separate physical site location, contact information and contact persons from any other Certified Capital Company and its respective managing/operating company (if applicable). A CAPCO and its managing/operating company may occupy the same physical site location.

“Principal Business Operations” means more than 50% of the business’ total assets are physically present in Colorado and more than 50% percent of the business' net income is allocable or apportionable to Colorado in accordance with Colorado income tax law regardless of whether such business is taxable or tax-exempt for Colorado income tax purposes. In addition, more than 75% of the business’ existing total salaries, wages and/or other compensation are paid to Colorado employees (calculated on a fulltime equivalent basis).

In regard to a Designated Rural County or a Distressed Urban Community, the Principal Business Operations means more than 50% of the business’ total assets are physically present in a Colorado Designated Rural County or Distressed Urban Community, as applicable, and more than 50% percent of the business' net income is allocable or apportionable to Colorado in accordance with Colorado income tax law regardless of whether such business is taxable or tax-exempt for Colorado income tax purposes.

In addition, more than 75% of the business’ existing total salaries, wages and/or other compensation are paid to Colorado employees (calculated on a full-time equivalent basis).

“Statute” means 10-3.5-101 through 10-3.5-110, 24-48.5-106 and 10-1-103, C.R.S.

“Utilized” shall have the meaning as outlined in the Statute and this regulation, except for the purposes of the internal rate of return calculations pursuant to 10-3.5-108, C.R.S. where “Utilized” shall have the meaning specifically defined within this regulation where internal rate of return calculations are described.

The definition of “Utilized” for the internal rate of return calculations shall be the allocated amount of Premium Tax Credits available for use in any given year [10% of the Premium Tax Credits allocated to the Certified Investor(s)]. However, the Office shall use the actual amount (as previously applied on Colorado premium tax returns) of Premium Tax Credits Utilized by a Certified Investor if a CAPCO provides the Office with verifiable documentation (prior to each proposed Distribution review and the Annual Review) demonstrating the amount of Premium Tax Credits Utilized by a Certified Investor. The amount Utilized shall not be adjusted subsequent to a completed proposed Distribution review or Annual Review.

“Working Days” means a business day in which the Colorado Office of Economic Development is open for normal business. A business day shall begin at 8:30AM Mountain Standard Time or Mountain Daylight Time, as applicable, and shall end at 5:00PM Mountain Standard Time or Mountain Daylight Time, as applicable.

CERTIFIED CAPITAL COMPANY APPLICATION 10-3.5-104, C.R.S.

Filing of Certified Capital Company Application 1. An Applicant, seeking certification as a Certified Capital Company, shall file an original paper copy of the application with the Office. No other form (such as e-mail or facsimile) of the application shall be accepted. Pertaining to the Rural Pool and/or the Statewide Pool, all Applicants shall fully complete, execute, and file an application with the Office no earlier than 8:30AM Mountain Standard Time or Mountain Daylight Time, as applicable, on October 31, 2001. Once all Premium Tax Credit Allocations for the Pool have been completed by the Office, additional applications shall not be considered by the Office for the Pool. Applications submitted prior to the stated time and date (whether by hand delivery or otherwise) shall be considered to be received as of the stated time and date.

2. The application format may be obtained directly from the Office in paper copy format, by e-mail with an attached Word file or by accessing the Office’s website at www.state.co.us/oed.

3. An application shall be deemed filed with the Office when the Office receives one original application, including originally executed pages where signatures are required, and the application fee.

Applications shall either be hand delivered with signature of receipt required, or delivered by a courier service or certified mail with signature of receipt required. The application must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202.

4. Once an application has been submitted to the Office, the Office shall not recognize such application and shall not certify an Applicant as a Certified Capital Company if there has been an exchange of money or other consideration for purposes of gaining an advantage in regard to the Office’s review of Applicant’s application and approval of an application for certification.

5. Whenever any material information that the Applicant supplied in its application has become inaccurate or obsolete, the Applicant shall file an amended application in a format prescribed by the Office, including originally executed signatory pages. Amended applications must be submitted within 5 business days, of the information becoming inaccurate or obsolete during the application process. Amended applications shall be filed in the same manner and using the same methods as described in this section, “Filing of Certified Capital Company Application”; however, no fee shall be required. The Applicant/CAPCO shall ask the Office to review the amended application and provide approval in the same manner that the Office reviews and approves initial applications; however, the 30-day time frame for approval shall begin upon the submittal of the amended application.

6. The Applicant shall, as soon as possible or within 5 business days, notify the Office in writing when: the Applicant is unable to continue as a viable going concern, the Applicant is subject to litigation which may affect its viability as a going concern, and/or if a merger or acquisition of the Applicant or by the Applicant has occurred. In the case of a merger or acquisition, the Office shall request additional information as needed to determine if the requirements of the CAPCO Statute and this

regulation continue to be met. Such notification shall be filed in the same manner and using the same methods as described in this section “Filing of Certified Capital Company Application” .

The 30-day time frame for approval shall begin upon the submittal of the amended application.

7. The Office shall stamp applications for certification, Notices of Intent to Request Premium Tax Credit Allocation from the Pool and amended applications with the date and time of receipt.

8. The Office reserves the right to determine what information is deemed material with regards to an Applicant fully completing, executing and filing an application, an amended application, or a Notice of Intent to Request Continuing Certified Capital Company Status with the Office.

Requirements of an Application The application shall contain:

1. A nonrefundable application fee in the amount of $7,500 in the form of a cashier’s check, certified check, or company check made payable to the State of Colorado.

2. Statements may be combined into one statement when several certifications are required by the same Person.

3. A statement, signed by a legally authorized representative of the Applicant, that states whether the application is applicable to tax credits associated with the Rural Pool and/or the Statewide Pool during the Pool application process.

4. Signature authorization documentation for the legally authorized representative of the Applicant, which is appropriate for the Applicant’s legal structure. For example, a fully executed board resolution (authorizing the President of the company to sign such documents and stating who the President is) would be acceptable signature authorization documentation if the Applicant’s legal entity is a Corporation.

5. Applicant’s complete legal organizational documents which reflect evidence of appropriate filing with appropriate state agencies, if filing is required, along with a signed self certification of good standing in said state dated no earlier than 60 business days prior to submittal. For example, a complete copy of a corporation’s articles of incorporation and by-laws (which have been filed with the Colorado Secretary of State and reflect a file date/number) and a signed self-certification of good standing in Colorado, would be appropriate legal organizational documents for a corporation.

6. Any “assumed or doing business as” names that the Applicant conducts business under and any required “assumed or doing business as” filings with a state agency, if applicable.

7. If the CAPCO is to be managed by a management or operating company, signature authorizations, the legal organizational documentation, any “assumed or doing business as” name filings, if applicable, appropriate contact people, phone numbers and street address for the management or operating company shall be submitted. Refer to items required under numbers 4., 5., and 6. of this section, “Requirements of an Application” , for further guidance on the type of documents.

8. If the CAPCO is to be managed by a management or operating company, the Applicant shall submit an executed contract between the Applicant and the management or operating company, which describes what actions, the management or operating company may take on behalf of the Applicant. Such contract shall be signed by a legally authorized representative of the Applicant and of the management or operating company. For example, the contract agreement may authorize the management or operating company to submit requests to the Office for a written opinion on the eligibility of a business as a Qualified Business or a Qualified Rural Business on behalf of the Applicant.

9. A list, including the name and address, of all members of the Applicant’s Board of Directors (voting or otherwise), officers, partners, trustees, managers, members, and principals. Such list shall describe the level of control over the Applicant and prospective CAPCO.

10. The address, phone number and individual contacts for the Applicant’s Principal Office or Headquarters location in Colorado.

11. A list, including the name and address, of all the Applicant’s existing office locations.

12. A list, including the name, Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners, address and description, of all Affiliates of the Applicant and a description of the Affiliate’s relationship with the Applicant.

13. A statement, signed by a legally authorized representative of the Applicant that states the primary business activity of the CAPCO is the Investment of Cash in Qualified Businesses and/or Qualified Rural Businesses.

14. An audited Balance Sheet, in the legal name of the Applicant, which verifies that the legal Applicant has an Equity Capitalization of $500,000 or more in the form of unencumbered cash, marketable securities, or other liquid assets. The audited Balance Sheet shall be accompanied by an originally executed, unqualified opinion from an Independent Certified Public Accountant, which states that the legal Applicant meets the Equity Capitalization requirement stated herein. The unqualified opinion shall be dated no earlier than 35 days before the application is submitted to the Office. The unqualified opinion shall be on the Independent Certified Public Accountant’s letterhead and shall include a complete street address and phone number. The Independent Certified Public Accountant shall be a member in good standing with the American Institute of Certified Public Accountants and, if requested by the Office, such good standing will be documented by a letter, dated no earlier than 60 business days before the submittal to the Office, from the President/Executive Director of the AICPA. If requested by the Office, a copy of the Independent Certified Public Accountant’s license in the U.S. state where he or she practices shall be submitted along with a statement from the issuer of the license that the Independent Certified Public Accountant is in good standing in the state where he or she practices dated no earlier than 60 business days of the submittal to the Office. Such statement from the issuer of the license shall contain a street address and phone number.

15. During the Pool application process, a statement, signed by a legally authorized representative of the Applicant, that states the Applicant has a least two principals or at least two individuals (hereafter identified as key employees) employed to manage the funds who have at least two years of money management experience in the venture capital industry if the Applicant is applying to be a Certified Capital Company for only the Statewide Pool or for both the Statewide Pool and the Rural Pool. Such statement shall also be signed by the two principals or the two key employees.

During the Pool application process, a statement, signed by a legally authorized representative of the Applicant, that states the Applicant has at least two principals or at least two individuals (hereafter identified as key employees) employed to manage the funds who each have at least two years of experience in either the venture capital or investment banking industry if the Applicant is applying to be a Certified Capital Company for only the Rural Pool. Such statement shall also be signed by the two principals or the two key employees.

16. The Statute requires that “The Office shall verify whether the Applicant meets the requirements of 10- 3.5-104(2)(d), C.R.S.,” pertaining to the experience of the Applicant’s principals or key employees. In order to accomplish this requirement, the following items shall accompany the statement, described in 15:

A. a detailed description of how each of the principals or each of the key employees specified in 10-3.5-104(2)(d), C.R.S., qualify as having at least two years of money management experience in the venture capital industry if the Applicant is requesting certification for only the Statewide Pool or both the Statewide Pool and the Rural Pool. Such description and supporting documents shall include, but not be limited to, a detailed resume with a listing of references including reference telephone numbers. The Office may, at its request, require additional information from the Applicant including, but not limited to, a description of the success of the principal/key employee in performing his/her function, the attainment of investment return goals, the number of businesses funded, the annual dollar amount of money for which he/she had primary responsibility, and the submission of historical financial statements and/or annual reports.

B. a detailed description of how each of the principals or each of the key employees qualify as having at least two years of venture capital or investment banking industry experience if the Applicant is requesting certification for only the Rural Pool. Such description and supporting documents shall include, but not be limited to, a detailed resume with a listing of references including reference telephone numbers. The Office may, at its request, require additional information from the Applicant including, but not limited to, a description of the success of the principal/key employee in performing his/her function, the attainment of investment return goals, the number of businesses funded, the annual dollar amount of money for which he/she had primary responsibility, and the submission of historical financial statements and/or annual reports.

C. a listing of all applicable licenses that each principal or key employee holds (or has held within the last ten years). Such listing shall indicate whether the license is active and in good standing, the date on which it will expire or did expire, whether any license has been revoked, the date of revocation and an explanation surrounding such revocation, whether any disciplinary action has ever been imposed upon the Applicant, the principals, and/or the key employees with regards to such license, the date of such disciplinary action and a description surrounding such disciplinary action, whether any investigation has ever been carried out on the Applicant, the principals, and/or the key employees with regards to such license, and the date of investigation and a description surrounding such investigation. Such listing shall be signed by each applicant, principal and/or key employee and attested as to its truth and validity;

D. the Applicant’s overall investment strategy and the Applicant’s three (3) year business plan, including an organizational chart, that has been prepared by the two principals or two key employees, as applicable , and which demonstrates the principals’ or key employee’s ability to invest cash in qualified businesses or qualified rural businesses pursuant to 10- 3.5-104 (3) C.R.S.; and E. an authorization stating that the Applicant, the principals and/or the key employees authorize the Office to conduct a background and credit investigation for the purpose of verifying whether the Applicant, the principals and/or the key employees meet the requirements for certification. The Applicant, the principals and/or the key employees may be asked to provide social security numbers and other information pursuant to 10-3.5-104(3), C.R.S.

The disclosure of social security numbers is voluntary. Social security numbers will be used only to determine whether the Applicant meets the requirements of the Statute.

Social security numbers are confidential.

17. A statement of disclosure from the Applicant’s principals, key employees and its management/operating company, if applicable, that will be involved in the direction, management or operation of the Certified Capital Company, stating that the Person has read the Colorado CAPCO Statute and regulations; fully understands the requirements of the Colorado Statute and regulations; is not affiliated with the Colorado Office of Economic Development and/or any of its employees and will not be affiliated with the Colorado Office of Economic Development and/or any of its employees during their affiliation with the Applicant; has never been convicted of and is not currently under indictment or prosecution for securities fraud or any other criminal acts (other than minor vehicle violations); has no overdue federal, state (any state in the United States), or local (any local government in the United States) tax payments or liens, has not been ordered to pay, and/or is not currently involved in legal action with the State of Colorado or any agency thereof for the payment of funds owed to the state, any agency of the State of Colorado, or other parties that the State of Colorado represents. Such statement of disclosure shall be supplied by the Office, shall be completed by each of the Applicant’s principals, key employees and its management/operating company, if applicable; and, shall require a full and complete explanation as to the reason and circumstances for any of the requirements described herein not being met.

18. A statement, signed by a legally authorized representative of the Applicant, which states that no insurance company or Affiliate of an insurance company shall, directly or indirectly manage the Applicant’s Certified Capital Company or control the direction of investments for the Applicant’s Certified Capital Company.

19. A separate listing of all Persons that have voting securities or other voting ownership interests in the legal Applicant along with the Person’s respective ownership percentage of such securities or ownership. The sum of all percentages on such list shall total one hundred percent (100%). No insurance company or Affiliate of an insurance company shall, directly, or indirectly, beneficially own, whether through rights, options, convertible interests, or otherwise, fifteen percent (15%) or more of the voting securities or other voting ownership interests of a Certified Capital Company.

20. A statement, signed by a legally authorized representative of the Applicant, stating that the information submitted in the application is complete and accurate.

21. A sample of offering materials used or to be used in investor solicitations. Any offering material involving the sale of securities of the Certified Capital Company shall include the following statement:

"BY AUTHORIZING THE FORMATION OF A CERTIFIED CAPITAL COMPANY, THE STATE

DOES NOT NECESSARILY ENDORSE THE QUALITY OF MANAGEMENT OR THE

POTENTIAL FOR EARNINGS OF SUCH COMPANY AND IS NOT LIABLE FOR DAMAGES OR

LOSSES TO A CERTIFIED INVESTOR IN THE COMPANY. USE OF THE WORD "CERTIFIED"

IN AN OFFERING DOES NOT CONSTITUTE A RECOMMENDATION OR ENDORSEMENT OF

THE INVESTMENT BY THE COLORADO OFFICE OF ECONOMIC DEVELOPMENT. IF ANY

APPLICABLE PROVISIONS OF THE "CERTIFIED CAPITAL COMPANY ACT" ARE VIOLATED,

THE STATE MAY REQUIRE FORFEITURE OF UNUSED PREMIUM TAX CREDITS AND

REPAYMENT OF USED PREMIUM TAX CREDITS."

22. A statement, from a legally authorized representative of the Applicant that states that all information submitted during the application phase will endure and continue to be legally binding if an Applicant is certified by the Office.

23. The Office reserves the right to request additional information after the application and the application fee have been submitted which is reasonable and necessary to complete the evaluation of the application.

24. The Office reserves the right to determine what information is deemed material with regards to an Applicant fully completing, executing and filing an application, an amended application, or a Notice of Intent to Request Continuing Certified Capital Company Status with the Office.

Approval of Application and Issuance of Certification Within thirty (30) days after receipt of an application (unless amendments to the application have been submitted), the Office shall issue the certification or deny the certification. The Office shall review and approve or reject applications in the order submitted, treating all applications received on the same day as being received simultaneously unless the application is incomplete (refer to “Incomplete Applications” ). The Office shall consider the requirements stated in the Statute, along with the information requested in this regulation, to determine if an Applicant shall be certified to be a Certified Capital Company. The certification issued by the Office shall indicate whether the certification is applicable to credits allocated pursuant only to the Rural Pool, only the Statewide Pool, or both the Rural Pool and the Statewide Pool during the Pool application process. The certification issued by the Office shall state that the certification is contingent upon all information submitted, except for maintaining Equity Capitalization, during the application phase continuing to be accurate and in force unless written approval for variances have been requested by the Applicant and approved by the Office. The certification issued by the Office shall be effective from the date of issuance and shall continue until such time as the CAPCO has been decertified pursuant to 10-3.5-109 C.R.S., whether such decertification is a result of the CAPCO’s Annual Review or otherwise.

Incomplete Application In the event of an incomplete application or if additional information has been requested by the Office, the application shall be treated as having been received on the date originally submitted only if the Applicant submits the additional information within fifteen (15) days after the date of the Office’s written request.

Upon receiving all requested information, the Office shall have ten (10) days from the day that the completed information was submitted to approve or reject the application and certification request. If all application requirements are not met within the time frame stated herein, the application shall be deemed withdrawn and the Office shall have no obligation to provide additional notices to the Applicant.

Denial of Application If an application is denied, the Office shall communicate in detail to the Applicant the grounds for the denial, including suggestions for the removal of such grounds. A denied Applicant must refile its revised application after taking into account the Office’s communication on the grounds for the denial and suggestions for the removal of such grounds. The application will then be treated as a new application in respect to the application process and time frames for reviewing it. Based on the extent of the revisions that need to be made by the Applicant and then reviewed by the Office, the Office shall determine if a new application fee shall be charged. False, inaccurate, or misleading information provided in the application shall be grounds for rejection of the application and denial of further consideration.

PREMIUM TAX CREDIT ALLOCATION PROCESS 10-3.5-106, C.R.S.

Premium Tax Credit Allocation Pools The Premium Tax Credit Allocation Pool of $100 million has been authorized by the CAPCO Statute.

Additionally, the Pool is further divided into a $25 million Rural Pool and a $75 million Statewide Pool, which may generally be referred to as Specific Pools.

Premium Tax Credit Allocation Claims 1. The Office of Economic Development shall accept Premium Tax Credit Allocation Claims filed by CAPCOs (on behalf of their investors), pertaining to the Pool, beginning no earlier than 8:30AM Mountain Standard Time or Mountain Daylight Time, as applicable, on April 8, 2002. All of the Rural Pool ($25,000,000) shall be fully allocated before the Office shall begin allocating the Statewide Pool ($75,000,000). The CAPCO shall previously have been certified by the Office to be a CAPCO in Colorado in order to be eligible to submit Premium Tax Credit Allocation Claims and such claims shall only be accepted for the Specific Pools for which the CAPCO has received certification. All Premium Tax Credit Allocation Claim forms submitted prior to the stated time and date (whether by hand delivery or otherwise) shall be considered as received on the stated time and date.

2. The CAPCO shall file original paper copies of the Premium Tax Credit Allocation Claim forms with the Office. No other form (such as e-mail, facsimile, etc.) of the forms shall be accepted.

3. The Premium Tax Credit Allocation Claim forms shall be deemed filed with the Office when the Office receives one original form from each Investor, including originally executed pages where signatures are required and a Master Claims Report from the CAPCO. The Premium Tax Credit Allocation Claim form and the Master Claims Report format shall be obtained directly from the Office. The forms shall either be hand delivered with signature of receipt required, or delivered by a courier service or certified mail with signature of receipt required. The forms must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202.

4. The Office shall stamp Premium Tax Credit Allocation Claim forms with the date and time of receipt.

5. If a CAPCO’s certification for the Pool is applicable to the Rural Pool and the Statewide Pool, the CAPCO on an aggregate basis with its Affiliates, shall not file Premium Tax Credit Allocation Claims in excess of $100,000,000. However, the CAPCO shall not file Premium Tax Credit Allocation Claims in excess of the maximum available under the Rural Pool ($25,000,000) and the Statewide Pool ($75,000,000). The CAPCO’s Premium Tax Credit Allocation Claim form shall specify that the Premium Tax Credit Allocation Claim is for an allocation of premium tax credits from the Rural Pool only, the Statewide Pool only, or both the Rural Pool and the Statewide Pool and shall state the amount requested from each of the Specific Pool(s). The CAPCO shall previously have been certified by the Office to be a CAPCO in Colorado in order to be eligible to submit Premium Tax Credit Allocation Claims and such claims shall only be accepted for the Specific Pools for which the CAPCO has received certification.

With respect to claims being filed for both the Rural Pool and the Statewide Pool, the maximum amount of Premium Tax Allocation Claims that any one Certified Investor and Affiliates may file, in the aggregate, in one or more Certified Capital Companies shall not exceed Fifteen Million dollars ($15,000,000).

If a Certified Capital Company, on an aggregate basis with its Affiliates, files Premium Tax Credit Allocation Claims in excess of the limits described herein, the Office shall consider the Premium Tax Credit Allocation Claim as not filed and shall mail it back to the CAPCO by regular mail.

6. If a CAPCO’s certification for the Pool is applicable only to the Statewide Pool, the CAPCO on an aggregate basis with its Affiliates, shall not file Premium Tax Credit Allocation Claims in excess of Seventy-Five Million Dollars ($75,000,000). The CAPCO’s Premium Tax Credit Allocation Claim form shall specify that the Premium Tax Credit Allocation Claim is for an allocation of premium tax credits from only the Statewide Pool and shall specify the dollar amount being requested. The CAPCO shall previously have been certified by the Office to be a CAPCO in Colorado in order to be eligible to submit Premium Tax Credit Allocation Claims and such claims shall only be accepted if the CAPCO has received certification for the Statewide Pool.

With respect to claims being filed for only the Statewide Pool, the maximum amount of Premium Tax Allocation Claims that any one Certified Investor and Affiliates may file, in the aggregate, in one or more Certified Capital Companies shall not exceed Fifteen Million dollars ($15,000,000).

If a Certified Company, on an aggregate basis with its Affiliates, files Premium Tax Credit Allocation Claims in excess of the limits described herein, the Office shall consider the Premium Tax Credit Allocation Claim as not filed and shall mail it back to the CAPCO by regular mail.

7. If a CAPCO’s certification for the Pool is applicable only to the Rural Pool, the CAPCO on an aggregate basis with its Affiliates, shall not file Premium Tax Credit Allocation Claims in excess of Twenty-Five Million Dollars ($25,000,000). The CAPCO’s Premium Tax Credit Allocation Claim form shall specify that the Premium Tax Credit Allocation Claim is for an allocation of premium tax credits from only the Rural Pool and shall specify the dollar amount being requested. The CAPCO shall previously have been certified by the Office to be a CAPCO in Colorado in order to be eligible to submit Premium Tax Credit Allocation Claims and such claims shall only be accepted if the CAPCO has received certification for the Rural Pool.

With respect to claims being filed for only the Rural Pool, the maximum amount of Premium Tax Credit Allocation Claims that any one Certified Investor and Affiliates may file in one or more Certified Capital Companies, in the aggregate, shall not exceed Twenty-Five Million Dollars ($25,000,000).

If a Certified Company, on an aggregate basis with its Affiliates, files Premium Tax Credit Allocation Claims in excess of the limits described herein, the Office shall consider the Premium Tax Credit Allocation Claim as not filed and shall mail it back to the CAPCO by regular mail.

8. For the Pool of One Hundred Million Dollars ($100,000,000), the aggregate amount of Certified Capital for which premium tax credits are allowed for all Certified Investors shall not exceed Ten Million Dollars ($10,000,000) per year for ten years beginning in tax year 2003 for the Pool in accordance with 10-3.5-105, C.R.S.

9. For the Pool, Investors shall not invest Certified Capital in CAPCOs prior to April 1, 2002 in order to be eligible to make a Premium Tax Credit Allocation Claim from the Pool.

10. In conjunction with this section, Premium Tax Credit Allocation Claims, each Premium Tax Credit Allocation Claim form shall be accompanied by an original statement executed by the prospective Certified Investor, which states:

A. that the Investor agrees to become legally bound and irrevocably committed to make an investment of Certified Capital in a CAPCO in the amount allocated by the Office, even if such amount is less than the amount requested on the Premium Tax Credit Allocation Claim form, subject only to the receipt of an allocation of Premium Tax Credits pursuant to 10-3.5-106 C.R.S.;

B. that the Investor has read the Colorado Statute and regulations related to this program and fully understands the CAPCO program requirements and the commitment being made by the Investor;

C. that the Investor agrees to pay the Office the amount of the fine levied by the Office, if such a fine is levied, for the Investor’s failure to invest the full amount of Certified Capital allocated by the Office to such Investor in accordance with the Premium Tax Credit Allocation Claim form filed by the CAPCO on its behalf. The Investor shall acknowledge that such fine, if levied by the Office, shall not exceed $50,000; and D. that if a fine is levied by the Office, the Investor agrees to submit a certified check, cashier’s check or company check made payable to the State of Colorado for the amount of the levied fine within ten (10) business days of receiving written notification from the Office of such fine.

11. In conjunction with this section, Premium Tax Credit Allocation Claims, each Investor shall submit either a Resolution from the Investor’s Board which states that the Board of Directors has authorized the individual(s) who signed such documents to enter into such contracts/agreements on behalf of the Investor or an incumbency certificate executed by the Secretary of the Investor attesting to the position with the Investor that is held by the individual(s) who signed such documents. Such position, which the individual(s) holds with the Investor, must be one that is given authority to sign such documents in the company’s By-Laws or other such document.

12. In conjunction with the requirements of this section, Premium Tax Credit Allocation Claims, each Investor shall submit: its address and Insurance Premium Tax Identification Number; a list of all insurance company Affiliates of the Investor (including the Affiliate’s name, the Affiliate’s Insurance Premium Tax Identification Number, the Affiliate’s address and a description of the Affiliate); a list of all Certified Capital Company Affiliates of the Investor (including the Affiliates' name, the Affiliates' address and a description of the Affiliate); and a description of the Investor’s relationship with the Affiliate.

The following definition of control shall be used by the Office.

Control means a person (e.g., firm, company, entity, natural person), who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the specific person. "Control” , including the terms “controlling” , “controlled by” , and “under common control with” , means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than commercial contract for goods or non-management services, or otherwise. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing fifteen percent or more of the voting securities of any other person. Each of a company’s officers, directors, or partners exercising executive responsibility (or persons having similar status or functions) is presumed to “control” the company. A person is presumed to control a corporation if the person: (1) directly or indirectly has the right to vote 15% or more of a class of the corporation’s voting securities, or (2) has the power to sell or direct the sale of 15% or more of a class of the corporation’ voting securities. A person is presumed to control a partnership if the person has the right to receive upon dissolution, or has contributed, 15% or more of the capital of the partnership. A person is presumed to control a limited liability company (LLC) if the person: (1) directly or indirectly has the right to vote 15% or more of a class of the interests of the LLC; (2) has the right to receive upon dissolution, or has contributed, 15% or more of the capital of the LLC; or (3) is an elected manager of the LLC.

The control determination shall include a review of: (1) all the officers, partners, or directors (or any person performing similar functions); (2) all persons directly or indirectly controlling or controlled by the entity in question; and (3) all of the current employees (other than employees performing only clerical, administrative, support or similar functions). In addition to the above definitions, if a person owns or controls less than the threshold of voting securities involved (15%), that person’s relationship with the remaining members in “control” or management should be examined to see if a “control block” exists, directly or indirectly.

In addition to the “test” based on status or voting control, an examination of the contractual, consulting, and other “arrangements” shall be undertaken to see if “control” is being directly or indirectly exercised.

If the CAPCOs, insurance companies, and/or other persons, as applicable, are not able to certify that they meet the above definition of control, then it shall be the responsibility of the CAPCOs, insurance companies, and/or other persons, as applicable, to submit an executed "Confirmation of Compliance with Affiliate and Control Definitions Form" (as issued by the Office), but specify on the Form the areas of noncompliance. Additionally, it shall be the responsibility of the CAPCOs, insurance companies, and/or other persons, as applicable, to provide documentation to the Office which substantiates that such control does not exist.

13. In conjunction with the requirements of this section, Premium Tax Credit Allocation Claims, the Premium Tax Credit Allocation Claim forms shall be accompanied by a descriptive list of guaranties, indemnities, bonds, insurance policies, or other payment undertakings that the CAPCO undertook or will undertake for the benefit of its Certified Investors. In no case shall more than one Certified Investor of the CAPCO or Affiliate of the Certified Investor be entitled to provide such payment undertakings in favor of the Certified Investors of the Certified Capital Company and its Affiliates in the State of Colorado. Such list shall include the amount of each payment undertaking, the provider of each payment undertaking in favor of the Certified Investors and a description of the payment undertaking. Such list shall be in the form of a statement by the CAPCO.

Calculation Method Utilized For Certified Capital For Which Premium Tax Credits Are Allowed The earliest date that Premium Tax Credit Allocation Claims for the Pool can be filed with the Office is April 8, 2002. The Certified Capital and Premium Tax Credits shall be allocated to Certified Investors, in Certified Capital Companies, in the order in which Premium Tax Credit Allocation Claims requesting an allocation of Premium Tax Credits under each Specific Pool are filed with the Office by Certified Capital Companies on behalf of their Certified Investors. The two Specific Pools, for which Premium Tax Credit Allocations shall be calculated, are the Rural Pool and the Statewide Pool.

The Office shall begin the process by ensuring that all requirements stated under “Premium Tax Credit Allocation Claims” have been met. The Office shall then begin allocating the Rural Pool ($25,000,000) based on the Premium Tax Credit Allocation Claims filed with the Office. All of the Rural Pool must be fully allocated before the Office can begin allocating the Statewide Pool ($75,000,000).

If two or more CAPCOs (and their Affiliates) file Premium Tax Credit Allocation Claims related to a Specific Pool with the Office on behalf of their Certified Investors on the same day and the sum of such Premium Tax Credit Allocation Claims exceeds, in the aggregate, the maximum aggregate amount available under such Specific Pool at the time of filing, the Certified Capital for which Premium Tax Credits are allocated shall be allocated among all Certified Investors filing on the same day utilizing a prorated basis for calculation purposes and as described herein.

The process herein determines the amount of Certified Capital for which Premium Tax Credits are allowed.

Calculation Example A After the Office verified compliance with all requirements stated under “Premium Tax Credit Allocation Claims,” assume that three Certified Capital Companies certified only for the Rural Pool were the only CAPCOs that submit a Premium Tax Credit Allocation Claim for the Rural Pool. On April 8, 2002, if CAPCO A's (and its Affiliates) Investors request $10 million dollars (over ten years) in premium tax credits; CAPCO B’s (and its Affiliates) Investors request $10 million dollars (over ten years) in premium tax credits; and CAPCO C’s (and its Affiliates) Investors request $25 million dollars (over ten years) in premium tax credits, then the total premium tax credits’ requests of $45 million dollars exceed the $25 million dollars in premium tax credits available under the Rural Pool. Therefore, CAPCO A's (and its Affiliates) Investors would be allocated ($10,000,000/$45,000,000) x $25,000,000 = .22 x $25,000,000 = $5,555,556 in tax credits (over ten years); CAPCO B's (and its Affiliates) Investors would be allocated the same amount of tax credits as CAPCO A’s investors which is $5,555,556 (over ten years) and CAPCO C’s (and Affiliates) Investors would be allocated ($25,000,000/$45,000,000) x $25,000,000 = .56 x $25,000,000 = $13,888,888 in tax credits (over ten years). The Office reserves the right to round up or down within $1.00 at its discretion in allocating Premium Tax Credits.

Calculation Example B If not fully allocated on the first day that a request(s) were received by the Office, then Premium Tax Credit Allocations shall be made in the amount requested. The premium tax credit allocations for claims filed on the first day shall be subtracted from the maximum available under the Specific Pool. The remaining balance shall become the new maximum available under the Specific Pool; however, the new maximum available will not impact the CAPCO’s Premium Tax Credit Allocation Claims’ limits as described in all requirements stated under “Premium Tax Credit Allocation Claims”. This process will continue to be utilized if Premium Tax Credit Allocation Claims for each specific date do not exceed the remaining, unallocated tax credit balance. In the event that Premium Tax Credit Allocation Claims exceed the remaining, unallocated tax credit balance on a specific date, the pro-rated calculation method shall then be utilized.

After the Office verified compliance with all requirements stated under “Premium Tax Credit Allocation Claims”, assume that two Certified Capital Companies certified only for the Rural Pool and one Certified Capital Company certified for both the Rural Pool and the Statewide Pool were the only CAPCOs that submit a Premium Tax Credit Allocation Claim for the Rural Pool.

On April 8, 2002, if CAPCO A's (and Affiliates) Investors request $5 million dollars (over ten years) in premium tax credits; CAPCO B’s (and Affiliates) Investors request $5 million dollars (over ten years) in premium tax credits; and CAPCO C’s (and Affiliates) Investors request $10 million dollars (over ten years) in premium tax credits, then the total requests of $20 million dollars do not exceed the $25 million dollars in premium tax credits available under the Rural Pool. Therefore, CAPCO A's Investors would be allocated $5,000,000 in premium tax credits (over ten years); CAPCO B's Investors would be allocated the same amount of premium tax credits as CAPCO A’s Investors which is $5,000,000 (over ten years) and CAPCO C’s Investors would be allocated $10,000,000 in premium tax credits (over ten years). After the $20 million dollars are allocated, $5 million dollars in premium tax credits will still be available. On April 11, 2002, CAPCO D’s (and Affiliates) Investors request $5 million dollars (over ten years) in premium tax credits and CAPCO E’s (and Affiliates) Investors request $10 million dollars (over ten years) in premium tax credits, then the total new requests of $15 million dollars exceed the remaining $5 million dollars in premium tax credits available after the initial allocation. Therefore, CAPCO D’s Investors would be allocated ($5,000,000/$15,000,000) x $5,000,000 = .33 x $5,000,000 = $1,666,667; and CAPCO E’s Investors would be allocated ($10,000,000/$15,000,000) x $5,000,000 = .67 x $5,000,000 = $3,333,333.

The Office reserves the right to round up or down within a $1.00 at its discretion in allocating Premium Tax Credits.

Calculation Example C Assume that either Calculation A or Calculation B has occurred. The Rural Pool would be fully allocated.

The Office shall allocate Premium Tax Credits from the Statewide Pool using the same method described in Calculation Example A and Calculation B.

Calculation Method Utilized For Premium Tax Credit Allocations to Individual Investors After calculating the Capital for which “Premium Tax Credits Are Allowed” for each CAPCO that submitted Premium Tax Credit Allocation Claims on behalf of its Certified Investors, the Office shall calculate the Premium Tax Credit Allocations to each Certified Investor of a Certified Capital Company. The amount of Capital for which “Premium Tax Credits Are Allowed” under a Specific Pool shall be allocated among the Certified Investors on a pro-rata basis. The pro-rata allocation for any one Certified Investor shall bear the same relation to the maximum aggregate amount available under each Specific Pool, as that Certified Investor’s Premium Tax Credit Allocation under such Specific Pool bears to the total of all Premium Tax Credit Allocation Claims seeking an Allocation of Premium Tax Credits pursuant to the same Specific Pool filed on behalf of all Certified Investors on the same day. Upon the receipt of the Investor’s Certified Capital in the amounts calculated herein, the amount determined by these calculations shall be the amount of Certified Capital provided to the CAPCO.

Calculation Example D Based on the calculation previously made under “Calculation Method Utilized For Certified Capital For Which Premium Tax Credits Are Allowed, Calculation Example A”, the amount of the Certified Capital for which “Premium Tax Credits Are Allowed” was determined. The Office shall now complete the pro-rata calculation to determine each Investor’s Allocation of Premium Tax Credits.

For simplicity, assume that none of the Investors (and Affiliates) are the same Investors (and Affiliates)— thus eliminating the need to verify that individual Investors (and Affiliates) have not exceeded certain maximum limitations. Assume that CAPCO’s (and Affiliates) submitted the following Premium Tax Credit Allocation Claims on behalf of their respective Investors (and Affiliates):

CAPCO A:

Investor’s Initial Claim Investor’s Allocation Investor 1 @ $1,000,000 ($1,000,000/$45,000,000)X$25,000,000 = $555,556 Investor 2 @ $1,000,000 ($1,000,000/$45,000,000)X$25,000,000 = $555,556 Investor 3 @ $1,000,000 ($1,000,000/$45,000,000)X$25,000,000 = $555,556 Investor 4 @ $1,500,000 ($1,500,000/$45,000,000)X$25,000,000 = $833,333 Investor 5 @ $1,500,000 ($1,500,000/$45,000,000)X$25,000,000 = $833,333 Investor 6 @ $ 500,000 ($ 500,000/$45,000,000) X $25,000,000 = $277,778 Investor 7 @ $ 500,000 ($ 500,000/$45,000,000) X $25,000,000 = $277,778 Investor 8 @ $ 500,000 ($ 500,000/$45,000,000) X $25,000,000 = $277,778 Investor 9 @ $1,000,000 ($1,000,000/$45,000,000)X$25,000,000 = $555,555 Investor 10 @ $1,500,000 ($1,000,000/$45,000,000)X$25,000,000 = 833,333 Total $10,000,000 Total $5,555,556 CAPCO B:

Investor 1 @ $1,200,000 ($1,200,000/$45,000,000)X$25,000,000 = $666,667 Investor 2 @ $1,200,000 ($1,200,000/$45,000,000)X$25,000,000 = $666,667 Investor 3 @ $1,2000,000 ($1,200,000/$45,000,000)X$25,000,000 = $666,667 Investor 4 @ $1,200,000 ($1,200,000/$45,000,000)X$25,000,000 = $666,667 Investor 5 @ $1,200,000 ($1,200,000/$45,000,000)X$25,000,000 = $666,667 Investor 6 @ $500,000 ($ 500,000/$45,000,000) X $25,000,000 = $277,778 Investor 7 @ $500,000 ($ 500,000/$45,000,000) X $25,000,000 = $277,778 Investor 8 @ $500,000 ($ 500,000/$45,000,000) X $25,000,000 = $277,778 Investor 9 @ $1,000,000 ($1,000,000/$45,000,000)X$25,000,000 = $555,555 Investor 10 @ $1,500,000 ($1,500,000/45,000,000) X $25,000,000 = $833,332 Total $10,000,000 Total $5,555,556 CAPCO C:

Investor 1 @ $3,750,000 ($3,750,000/$45,000,000)X$25,000,000=$2,083,333 Investor 2 @ $3,750,000 ($3,750,000/$45,000,000)X$25,000,000= $2,083,333 Investor 3 @ $3,750,000 ($3,750,000/$45,000,000)X$25,000,000= $2,083,333 Investor 4 @ $3,750,000 ($3,750,000/$45,000,000)X$25,000,000= $2,083,333 Investor 5 @ $3,750,000 ($3,750,000/$45,000,000)X$25,000,000= $2,083,333 Investor 6 @ $3,750,000 ($3,750,000/$45,000,000)X$25,000,000= $2,083,333 Investor 7 @ $500,000 ($500,000/$45,000,000)X $25,000,000 = $277,778 Investor 8 @ $2,000,000 ($2,000,000/$45,000,000)X$25,000,000= $1,111,112 Total $25,000,000 Total $13,888,888 TOTAL SPECIFIC POOL ALLOCATION = $25,000,000 ($5,555,556 + $5,555,556 + $13,888,888)

Calculation Example E Based on the calculation previously made under “Calculation Method Utilized For Certified Capital For Which Premium Tax Credits Are Allowed, Calculation Example B”, the amount of the Certified Capital for which “Premium Tax Credits Are Allowed” was determined. The Office shall now complete the pro-rata calculation to determine each Investor’s Allocation of Premium Tax Credits.

For simplicity, assume that none of the Investors (and Affiliates) are the same Investors (and Affiliates)— thus eliminating the need to verify that individual Investors (and Affiliates) have not exceeded certain maximum limitations. No calculations are needed for CAPCO A, CAPCO B, and CAPCO C since the Individual Investors shall receive the amount requested. Calculations are needed for CAPCO D and CAPCO E. Assume that CAPCO’s (and Affiliates) submitted the following Premium Tax Credit Allocation Claims on behalf of their respective Investors:

CAPCO A:

Investor’s Initial Claim Investor’s Allocation Investor 1 @ $750,000 $750,000 Investor 2 @ $750,000 $750,000 Investor 3 @ $750,000 $750,000 Investor 4 @ $750,000 $750,000 Investor 5 @ $750,000 $750,000 Investor 6 @ $750,000 $750,000 Investor 7 @ $500,000 $500,000 Total $5,000,000 Total $5,000,000 CAPCO B:

Investor 1 @ $750,000 $750,000 Investor 2 @ $750,000 $750,000 Investor 3 @ $750,000 $750,000 Investor 4 @ $750,000 $750,000 Investor 5 @ $750,000 $750,000 Investor 6 @ $750,000 $750,000 Investor 7 @ $500,000 $500,000 Total $5,000,000 Total $5,000,000 CAPCO C:

Investor 1 @ $1,500,000 $1,500,000 Investor 2 @ $1,500,000 $1,500,000 Investor 3 @ $1,500,000 $1,500,000 Investor 4 @ $1,500,000 $1,500,000 Investor 5 @ $1,500,000 $1,500,000 Investor 6 @ $1,500,000 $1,500,000 Investor 7 @ $1,000,000 $1,000,000 Total $10,000,000 $10,000,000 CAPCO D:

Investor 1 @ $750,000 ($750,000/$15,000,000) X $5,000,000* = $250,000 Investor 2 @ $750,000 ($750,000/$15,000,000) X $5,000,000* = $250,000 Investor 3 @ $750,000 ($750,000/$15,000,000) X $5,000,000* = $250,000 Investor 4 @ $750,000 ($750,000/$15,000,000) X $5,000,000* = $250,000 Investor 5 @ $750,000 ($750,000/$15,000,000) X $5,000,000* = $250,000 Investor 6 @ $750,000 ($750,000/$15,000,000) X $5,000,000* = $250,000 Investor 7 @ $500,000 ($500,000/$15,000,000) X $5,000,000* = $166,667 Total $5,000,000 Total $1,666,667 *$5,000,000 is the denominator since this is the amount of the Specific Pool that was available on the day that CAPCO D and CAPCO E made their Premium Tax Credit Allocation Claims.

CAPCO E:

Investor 1 @ $1,500,000 ($1,500,000/$15,000,000)X$5,000,000* = $500,000 Investor 2 @ $1,500,000 ($1,500,000/$15,000,000)X$5,000,000* = $500,000 Investor 3 @ $1,500,000 ($1,500,000/$15,000,000)X$5,000,000* = $500,000 Investor 4 @ $1,500,000 ($1,500,000/$15,000,000)X$5,000,000* = $500,000 Investor 5 @ $1,500,000 ($1,500,000/$15,000,000)X$5,000,000* = $500,000 Investor 6 @ $1,500,000 ($1,500,000/$15,000,000)X$5,000,000* = $500,000 Investor 7 @ $1,000,000 ($1,000,000/$15,000,000)X$5,000,000* = $333,333 Total $10,000,000 Total $3,333,333 *$5,000,000 is the denominator since this is the amount of the Specific Pool that was available on the day that CAPCO D and CAPCO E made their Premium Tax Credit Allocation Claims.

TOTAL SPECIFIC POOL ALLOCATION = $25,000,000 ($5,000,000 + $5,000,000 + $10,000,000 + 1,666,667 + $3,333,333)

Allocation Date and Written Notification of Premium Tax Credit Allocation Within 5 business days (except as noted below) after the Office receives a Premium Tax Credit Allocation Claim filed by a Certified Capital Company on behalf of one or more of its Certified Investors, the Office shall notify (by overnight courier with signature of receipt required) the Certified Capital Company of the amount of tax credits allocated to each of the Certified Investors in such Capital Company. Such date shall be the Allocation Date. An alternative Certified Investor or other investor may not contribute Certified Capital to the CAPCO in lieu of the Certified Investor listed on the Office’s notification.

However, Premium Tax Credit Allocation Claims filed for the Statewide Pool shall not be allocated until the Rural Pool has been fully allocated. The Office shall begin allocating the Statewide Pool the next business day after the Rural Pool has been fully allocated. Within 5 business days after the Office begins allocating the Statewide Pool, as applicable, the Office shall notify the Certified Capital Company of the amount of tax credits allocated to each of the Certified Investors in such Certified Capital Company. Such date shall be the Allocation Date. An alternative Certified Investor may not contribute Certified Capital to the CAPCO in lieu of the Certified Investor listed on the Office’s notification.

The Written Notification of Premium Tax Credit Allocation shall require that the CAPCO submit to the Office, within 30 business days of the date of the Written Notification of Premium Tax Credit Allocation, a copy of all material documents relating to each Certified Investor’s investment of Certified Capital and a report containing the following information:

1. The name of each Certified Investor from which the Certified Capital was received (delineated by Specific Pool), including such Certified Investor’s Insurance Premium Tax Identification Number;

2. The date on which the Certified Capital was received by the CAPCO delineated by Specific Pool;

3. The amount of each Certified Investor’s investment of Certified Capital and Capital and Premium Tax Credits (the same amount), delineated by Specific Pool; and 4. Supporting documentation, such as a statement from the CAPCO’s financial institution receiving the deposit on behalf of the CAPCO, stating: that the deposit or wire transfer has been completed; the specific amount of the deposit or wire transfer, the date of the deposit or wire transfer, and that the funds are “collected funds” at the financial institution.

With respect to a CAPCO that participated in both the Rural Pool and the Statewide Pool, the 5-business day and 30-business daytime periods set forth in this section will begin on the Allocation Date for the Statewide Pool.

Forfeiture of Allocation and Reallocation of Premium Tax Credits In the event that a CAPCO does not receive an investment of Certified Capital equaling the amount of Premium Tax Credits Allocated to the CAPCO’s investors within 5 business days of the receipt of the Office’s notification (by overnight courier with signature of receipt required) of the Premium Tax Credit Allocated to the CAPCO’s investors, the CAPCO shall notify the Office immediately, within 24 hours, by overnight courier with signature of receipt required. As a result of such notification from the CAPCO, the Premium Tax Credit Allocation for the specific investor(s) shall be forfeited. If the Office has not received a copy of all documents relating to each Certified Investor’s investment of Certified Capital and the required report within 30 business days, the Premium Tax Credit Allocation for the specific investor(s) shall be forfeited.

If forfeiture of Premium Tax Credit Allocations occurs, the Office shall recalculate the Premium Tax Credit Allocations for each Specific Pool, if affected by such forfeiture, and shall redistribute the forfeited Premium Tax Credit Allocations based on other investor’s initial commitment of Certified Capital. Such recalculation shall utilize the same methods described in the Premium Tax Credit Allocation Process but the now ineligible investors shall not be included in the calculations. If such a pro rata redistribution occurs, the Office shall notify (by overnight courier with signature of receipt required) the Certified Capital Company of the new amount of tax credits allocated to each of the eligible Certified Investors in such Capital Company. Such date of notification shall be the new Allocation Date and the requirements described in this section for receiving investments and notifying the Office shall begin as of such new Allocation Date.

CONTINUING CERTIFICATION REQUIREMENTS 10-3.5-107 C.R.S.

A Certified Capital Company must fully comply with all of the requirements described under the following sections of “CONTINUING CERTIFICATION REQUIREMENTS”.

Continued Accuracy of Information Submitted in the Application Whenever any material information that the CAPCO supplied in its initial application becomes inaccurate or obsolete (including, but not limited to, retention of the two experienced principals or key employees reflected in the application), the CAPCO shall file an amended application in a format prescribed by the Office, including originally executed signatory pages. Amended applications shall be submitted within 10 business days of the information becoming inaccurate or obsolete; however, amended applications shall be filed within 5 business days in the event any of the experienced principals or key employees required in the Statute leaves the CAPCO. Amended applications shall be filed in the same manner and using the same methods as described in the section, “Filing of Certified Capital Company Application” ; however, no fee shall be required. The CAPCO shall notify its Certified Investors of the amended application and a copy of such notification shall be provided to the Office. Amended applications shall demonstrate the CAPCO’s continued ability to be in compliance with initial application requirements.

Continuation as a Viable Going Concern The CAPCO shall, as soon as possible, but in any event within 5 business days, notify the Office and its Certified Investors in writing when the CAPCO may be unable to continue as a viable going concern or when the CAPCO is subject to litigation which may affect its viability as a going concern. Examples of when a CAPCO may be unable to continue as a viable going concern include, but are not limited to, the inability of a CAPCO to make scheduled debt payments (including principal, interest, and any applicable fees) and/or other obligations of the CAPCO, either in the ordinary course of business or otherwise, within the terms of when such payments are due. Notifications shall either be hand delivered with signature of receipt required, or delivered by a courier service or certified mail with signature of receipt required. Such notifications must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202.

Upon the CAPCO notifying the Office by the procedure outlined in this section or if a viable going concern issue is noted in any audits, procedural reviews, or compliance reviews received by the Office, the CAPCO shall immediately discontinue any further investment of Certified Capital in Qualified Businesses or Qualified Rural Businesses unless interim management by an entity authorized in the Statute has occurred.

Interim Management Notification In the event interim management is assumed as authorized in the Statute, the assuming entity shall immediately notify the Office in writing and provide a plan and timetable for selecting replacement CAPCO management. Such notification shall be hand delivered with signature of receipt required, or delivered by a courier service or certified mail with signature of receipt required. The notification must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202. By the 10th of the following month in which the interim management was assumed and continuing monthly thereafter, the assuming entity shall provide a written status update on the hiring of replacement management.

Submittal of Documentation for Certified Investor’s Investment of Certified Capital The Written Notification of Premium Tax Credit Allocation shall require that the CAPCO submit to the Office, within 30 business days of the date of the Written Notification of Premium Tax Credit Allocation, a copy of all material documents relating to each Certified Investor’s investment of Certified Capital and a report containing the information described in the “Allocation Date and Written Notification of Premium Tax Credit Allocation” section of “PREMIUM TAX CREDIT ALLOCATION PROCESS” in this regulation.

All documents relating to the Certified Investors’ investment of Certified Capital in the CAPCO shall be made available at the time of Audit or Office Annual Review.

Eligibility Determination For CAPCO Qualified Investments A CAPCO shall use its Certified Capital to make Qualified Investments in Qualified Businesses and/or Qualified Rural Businesses. Such Qualified Investments shall occur after the Allocation Date pertaining to such Certified Capital. If a CAPCO substitutes Certified Capital for any investment made prior to the Allocation Date and/or the CAPCO uses Certified Capital to purchase all or part of an investment made prior to the Allocation Date, then such use of Certified Capital shall not be considered a Qualified Investment under this program.

In order to meet Qualification requirements, the CAPCO’s investment: 1) must be a Qualified Investment of Cash,2) must be in a Qualified Business or Qualified Rural Business; and must meet the definition of Qualified Investment as defined in 10-3.5-103(14). In order to be a Qualified Investment of Cash, the investment must meet the Investment of Cash definition found in the DEFINITION section of these regulations and must meet the Investment of Cash eligibility determination as set forth below. In order to be a Qualified Business or Qualified Rural Business, the business must meet the definition of a Qualified Business or a Qualified Rural Business as defined in 10-3.5-103(11) and 10-3.5-103(15), C.R.S. respectively and must meet the Qualified Business/Qualified Rural Business eligibility determination set forth below. Both eligibility determinations must be met in order for any CAPCO investment to be deemed a Qualified Investment.

1. In order to make an eligibility determination with regard to the investment meeting the Investment of Cash criteria, prior to making any Qualified Investment in the form of debt or a convertible instrument which could result in debt or debt characteristics, then the CAPCO shall submit or maintain, as applicable, the following information for the Office’s review:

A. Proof that the business is unable to obtain a loan as defined by the Colorado State Banking Board Commercial Bank Rules (CB101.42). To meet this requirement, the business must have applied for and been declined bank financing. Before May 27, 2004, a decline letter from a bank which is located within 100 miles of the business’ primary business operation, whose geographic marketing area includes the location of the business’ primary business operation, and which is located within the State of Colorado must be provided to the Office. On or after May 27, 2004, two declination letters from two different commercial banks that are federally or state chartered in the State of Colorado and that make small business loans, at least one of which banks is a preferred or certified lender designated by the federal small business administration and which is located within 100 miles of the business’ primary business operation, whose geographic marketing area includes the location of the business’ primary business operation, and which is located within the State of Colorado (unless a preferred or certified lender is not located within these geographic restrictions and in that case, the geographic restrictions except for Colorado will not apply) must be provided to the Office. Such declination letters must be dated no earlier than 90 business days prior to the CAPCO’s investment, shall be executed on bank letterhead, and shall contain a complete address and phone number for the bank and the name of the company’s contact at the bank. The decline letters shall indicate that the bank has been requested to provide a loan for the same reason for which the CAPCO may provide an investment; the bank has been provided with sufficient information required by the bank to made a determination of financing eligibility; the bank declines to fund the entire amount and/or a portion of the total financing requested; and the bank official certifies that the bank is located within 100 miles of the business’ primary business location, the business’ primary business location is within the bank’s geographic marketing area, the bank is located within the State of Colorado, and when applicable, the bank is a commercial bank that is federally or state chartered in the State of Colorado and makes small business loans and is a preferred or certified lender designated by the federal small business administration.

The CAPCO shall be required to provide a certification (format to be contained in the Qualified Business Determination form) that the loan that it proposes to make is not a loan as defined under Colorado State Banking Board Commercial Bank Rules (CB101.42). Loan decline letters shall not be required when such certification is provided and accepted by the Office. The Office will consult with the Division of Banking when such approval is requested.

B. Proof that the business is unable to obtain financing from the Revolving Loan Funds operating within the State of Colorado. Such Revolving Loan Funds have received funding previously or currently from Community Development Block Grant Funds, which the Office administers. A current list of the Revolving Loan Funds and their respective geographical service areas may be obtained from the Office. A current list is one, which has been obtained from the Office no more than 90 business days prior to any investment being made by a CAPCO. To meet this requirement, the business must have applied for and been declined Revolving Loan Fund financing (if a Revolving Loan Fund serves the geographical area for the company’s primary business operations in the State of Colorado). A decline letter from the Revolving Loan Fund which serves the geographical area for the business’ primary business operation within Colorado shall be executed on the Revolving Loan Fund’s letterhead and shall be dated no earlier than 90 business days prior to the CAPCO’s investment. The decline letter shall indicate that the Revolving Loan Fund has been requested to provide a loan for the same reason for which the CAPCO may provide an investment; the Revolving Loan Fund has been provided with sufficient information required by the Revolving Loan Fund to made a determination of financing eligibility; the Revolving Loan Fund declines to fund the entire amount and/or a portion of the total financing requested. If a Revolving Loan Fund does not cover the geographical area where the company’s principal business operations are located, then the CAPCO shall submit a statement to such effect.

C. On or after May 27, 2004, a certification shall be provided by the CAPCO that states that any loan made by a CAPCO shall not be made through or in connection with any guaranteed loan program. CAPCO files shall contain loan documentation that verifies this certification.

2. In order to make an eligibility determination with regard to Qualified Business or Qualified Rural Business, the CAPCO shall submit or maintain, as applicable, the following information for the Office’s review:

A. The CAPCO shall submit an original statement executed by the CAPCO and the business which:

1. States the business’ legal name and street address;

2. States if the CAPCO’s first investment in the business occurred before May 27, 2004:

a. that the business is Headquartered as defined in this regulation in the State of Colorado;

b. the business’ Principal Business Operations as defined in this regulation are located in the State of Colorado;

c. that the business is a small business concern as described in the small business size regulations of the United States Small Business Administration, 13 CFR 121.201; and d. that it is not a business predominately engaged in professional services provided by accountants or lawyers.

3. States if the CAPCO’s first investment in the business occurred on or after May 27, 2004:

a. either that the business is Headquartered as defined in this regulation in the State of Colorado, its Principal Business Operations as defined in this

regulation are located in the State of Colorado and the Certified Capital Company has a reasonable expectation, based upon an affidavit of one of the principal officers of the business or other comparable evidence, that the business intends to preserve its Headquarters and principal place of business in Colorado for at least three years after the Qualified Investment and that the business will expend 80% (unless otherwise approved by the Office) of the Qualified Investment within Colorado. If a business meets some but not all of these criteria the business may nevertheless be deemed to be a Qualified Business if the Colorado Economic Development Commission determines that an investment of Certified Capital proposed by a CAPCO pursuant to this article will further the economic development of the State; or b. that the business has entered into a contract with the CAPCO to comply with the requirements stated in 3.a. above within ninety days after the finalization/execution of the contract and the contract contains enforceable provisions requiring a return of any investment of Certified Capital if the business fails to so comply;

4. States the business’ number of employees, as defined by the United States Small Business Administration’s (“SBA” ) guidance for 13 CFR 121.201, delineated by its Colorado location(s) and non-Colorado location(s);

5. States the business’ North American Industry Classification System (“NAICS” ) code based on the business’ industry and sub sector;

6. States if the CAPCO’s first investment in the business occurred on or after May 27, 2004, that it is not a business predominantly engaged in:

a. Professional services provided by accountants, doctors, or lawyers;

b. Banking or lending;

c. Real estate development;

d. Insurance;

e. Oil and gas exploration;

f. Direct gambling activities, which shall not include ancillary gambling equipment and other indirect gambling activities such as manufacturing of gambling machines, etc; or g. Businesses that make loans to or invest in a Certified Capital Company or an affiliate of a Certified Capital Company or Insurance Company.

7. Contain a comprehensive and concise analysis of how the business qualifies under the SBA’s 13 CFR 121.201. Such analysis shall include a specific determination for every criteria listed in the SBA’s guidance for 13 CFR 121,201, including the SBA guidance issued on “How does SBA establish size standards?” , “What is affiliation?” , “How does SBA calculate annual receipts?” , “How does SBA define business concern or concern?” , “How does SBA calculate number of employees?” , “How does SBA determine a concern’s primary industry?” , and “What size standards has SBA identified by North American Classification System codes?” . If specific criteria are not applicable, then the analysis shall so state and provide the reason why it is not applicable. Such comparisons, with the SBA size standards found under 13 CFR 121.201, shall utilize the most recent SBA size standards available;

8. Is dated no earlier than 90 business days before the date submitted to the Office for a written opinion. If a written opinion is not requested, the statement shall be dated no earlier than 90 business days before the CAPCO’s initial investment in the Qualified Business, as applicable, and maintained in the CAPCO’s files with all supporting documentation;

9. States that the business’ Principal Business Operations, as defined in this regulation, are in a Designated Rural County or Distressed Urban Community if applicable, as defined in this regulation;

10. States that supporting documentation, for all of the above statements, is attached to the request submitted to the Office for a written opinion or shall be available for review by the Office, at its discretion any time, if the Office’s determination will not be made until the Office’s Annual Review. Such supporting documentation shall include, but not be limited to, legal structure documentation; specific authorization for the individual to execute such statements on behalf of such business as well as stating individual’s capacity for such business; a business plan; complete financial statements, including the preparer’s cover letter and notes, as described in the SBA’s guidance for 13 CFR 121.201; state and federal tax returns for the most recent 3 year fiscal period, or the portion of the period for which they are available if the business has been in operation less than 3 years; payroll reports described in the SBA’s guidance for 13 CFR 121.201, which are further delineated by Colorado and non-Colorado operations and again, further divided by Designated Rural County or Distressed Urban County if applicable; a statement, dated no earlier than 90 business days from the date submitted to the Office or from the initial investment in the business by a CAPCO, from the local Enterprise Zone Administrator stating that the business is located within a Distressed Urban County if applicable; and any other information submitted by the business or obtained by the CAPCO in regard to the request.

11. States that the CAPCO shall not invest more than 15% of its Total Certified Capital in any one Qualified Business or Qualified Rural Business, as applicable. The CAPCO shall provide a statement, dated no earlier than 90 business days before the submittal to the Office or the investment in the business, which states the Specific Pool to be utilized, the amount of investment and the type of investment it will make in the business.

12. States that the CAPCO shall not own, through an initial Qualified Investment occurring on or after May 27, 2004, in aggregate total with a business that was organized by (to include any business with a proposed or actual investment of equity or with equity features from a CAPCO), is a franchisee of, or is an affiliate of, the CAPCO, more than 49% of any one Qualified Business or Qualified Rural Business without specific approval of the Office; except that nothing in this paragraph shall preclude a CAPCO from exercising any:

a. Right or remedy upon a default by the Qualified Business pursuant to an investment contract; or b. Anti-dilution or preemptive rights it may have been granted in connection with an initial Qualified Investment that can be exercised upon an investment in the business by a party other than the CAPCO or an affiliate of the CAPCO.

13. States that the business either does or does not qualify for the definition of seed and early stage as defined in 10-3.5-103(15.5), C.R.S at the time of the initial Qualified Investment. If the business does qualify under this definition, supporting documentation for the items required in 10-3.5-103(15.5), C.R.S will need to be submitted to the Office with the request for determination.

For Qualified Businesses/Qualified Investments that previously were approved by the Office but did not receive approval as meeting the definition of seed and early stage as defined in 10-3.5-103(15.5) C.R.S at the time of the initial Qualified Investment, a CAPCO can complete the information found in Exhibit A of this regulation and submit it to the Office for approval.

B. If the CAPCO did not submit an original statement executed by the CAPCO and the business along with supporting documentation as described in 2.A. within this section, then the CAPCO shall maintain such statement and supporting documentation in its files for review during the Annual Review.

3. At its option, a CAPCO, making a proposed investment in a business, may request from the Office a written opinion that the Investment of Cash either before or after the investment, which it proposes should be considered a Qualified Investment. And, at its option, a CAPCO, making a proposed investment in a business, may request from the Office a written opinion that the business in which it proposes to invest either before or after the investment, should be considered a Qualified Business or a Qualified Rural Business, as applicable.

A. Upon receiving such request, the Office shall have 10 business days to determine whether the investment and the business meet the applicable eligibility determinations. The Office shall notify the CAPCO of its determinations with an explanation of such determinations.

B. If the business is determined to be a Qualified Business or a Qualified Rural Business by the Office and the Investment of Cash is determined to be a Qualified Investment, the CAPCO must make such investment in said business within a 6-month period or the Office’s determination shall be null and void.

C. If the Office determines that the business is a Qualified Business or a Qualified Rural Business or if the Office determines that the Investment of Cash is a Qualified Investment, and a merger or acquisition of the business is negotiated before the CAPCO has made any investments in said business, the Office’s determination shall be null and void.

D. If insufficient information has been provided to the Office, the Office shall notify the CAPCO that the business does not meet the eligibility determinations due to the information provided to the Office being insufficient. If the CAPCO resubmits the request with additional information, the 10-business day period shall begin again at that time.

E. If the Office fails to notify the CAPCO with respect to the proposed investment within such 10 working day period, the Investment of Cash, which the CAPCO proposes shall be deemed to be a Qualified Investment and the business in which the CAPCO proposes to invest shall be deemed to be a Qualified Business or Qualified Rural Business, as applicable.

F. If the Office has made a written determination that a business is a Qualified Business or a Qualified Rural Business and/or that the Investment of Cash is a Qualified Investment but the CAPCO’s first investment in the business did not occur before May 27, 2004, the Office’s determination shall be null and void.

4. If a CAPCO has not requested a written opinion regarding the Qualified Investment eligibility determination described in this section, the Office shall make such determination during its Annual Review.

5. If the Office determines that a business in which a Certified Capital Company proposes to invest before May 27, 2004, is not a Qualified Business or a Qualified Rural Business because it does not meet all of the criteria set forth in section 10 3.5 103 (11)(a) or (15), C.R.S., as applicable, the Office may nevertheless consider the business a Qualified Business or Qualified Rural Business, as applicable, if the Colorado Economic Development Commission determines that investment in the proposed business will further the economic development of the state. The following criteria must be met:

A. If the business does not meet all of the criteria set forth in 10-3.5-103(11) or (15), C.R.S., as applicable, the business must still meet some of the criteria.

B. For the Colorado Economic Development Commission to review a proposed investment in a business which does not meet all of the criteria set forth in 10-3.5-103(11) or (15), C.R.S., as applicable, the Investment of Cash must meet the Qualified Investment criteria as set forth in this section and the Director must first request the Colorado Economic Development Commission to review the proposed business and provide a recommendation.

C. The review by the Colorado Economic Development Commission shall be scheduled at the Colorado Economic Development Commission’s convenience.

D. Based on the recommendation made by the Colorado Economic Development Commission, the Director shall approve or deny the proposed business accordingly as meeting the definition of a Qualified Business or a Qualified Rural Business and thus shall approve or deny the proposed investment as Qualified.

6. A business that is classified as a Qualified Business or a Qualified Rural Business at the time of the first investment in said business by a CAPCO, when such investment occurs before May 27, 2004 shall remain classified as a Qualified Business or a Qualified Rural Business, as applicable, and may receive continuing investments from any CAPCO or any of its Affiliates. Such continuing investments, as long as they meet the Investment of Cash eligibility determination, shall be Qualified Investments even though such business may not meet the definition of a Qualified Business or a Qualified Rural Business, as applicable, at the time of such continuing investments.

7. A business that is classified as a Qualified Business or a Qualified Rural Business at the time of the first investment in said business by a CAPCO, when such investment occurs on or after May 27, 2004 shall remain classified as a Qualified Business or a Qualified Rural Business, as applicable, and may receive continuing investments from any CAPCO or any of its Affiliates. Such continuing investments, as long as they meet the Investment of Cash eligibility determination, shall be Qualified Investments even though such business may not meet the definition of a Qualified Business or a Qualified Rural Business, as applicable, at the time of such continuing investments except that:

A. A business that is classified as a Qualified Business or Qualified Rural Business at the time of the first investment in said business by a CAPCO, when such investment occurs on or after May 27, 2004, but subsequently violates the requirements of section 10-3.5- 103(11)(b)(I) or 11(c) within the first six months after such Qualified Investment, shall not be deemed to be a Qualified Business or a Qualified Rural Business, as applicable, for the purposes of 10-3.5-107(1) and 10-3.5-109(2)(a) and may not receive continuing investments from any Certified Capital Company or any of its affiliates.

B. An investment in a business that relocates either its headquarters or its principal business operations outside of Colorado after six months, but less than three years after the initial Qualified Investment shall:

1. Not be deemed to satisfy a requirement of section 10-3.5-109(2)(a) if such requirement has not already been complied with and if the relocation occurred during the CAPCO’s investment in the business; and 2. Be deemed to continue to satisfy a requirement of section 10-3.5-109(2)(a) that has already been complied with and paragraphs (a) and (b) of section 10-3.5-107(1).

C. Unless otherwise determined by the Economic Development Commission, a business shall not be eligible to receive further Qualified Investments if:

1. It has relocated its headquarters or principal business operations outside of this State; or 2. It has not expended 80% of its prior Qualified Investments within Colorado; except that this limitation shall not be deemed to either:

a. Preclude the purchase of services or goods from outside of Colorado if such services are performed and such goods are used in Colorado; or b. Apply retroactively to disqualify a Qualified Investment previously approved by the Office after the Qualified Investment has been made.

Eligibility of Other Investments of Certified Capital All Certified Capital, not currently invested in Qualified Investments by the CAPCO, shall be invested in types of investments authorized specifically by 10-3.5-107(6), C.R.S.

January 31st Report and Continued Certification Fee On or before January 31st of each year, each CAPCO shall submit the following to the Office:

A report containing:

1. The amount of the CAPCO’s Certified Capital at the end of its immediately preceding fiscal year;

2. Whether or not the CAPCO has invested more than 15% of its Total Certified Capital in any one business; and 3. All Qualified Investments that the CAPCO made during the previous calendar year;

3. A nonrefundable certification fee of $5,000 except that no such fee shall be required within 6 months of the initial allocation date of a Specific Pool(s) of a CAPCO. Only one such certification fee shall be required annually regardless of the number of Specific Pools for which the CAPCO received certification or if additional Specific Pools are authorized for such CAPCO. If a CAPCO fails to pay the certification fee within 60 business days after January 31st, the CAPCO may be subject to decertification.

4. The location and number of new jobs that have been created due to the CAPCO’s Qualified Investments during the previous twelve months and since the CAPCO’s initial Qualified Investment. Such new jobs shall be reported on a full-time equivalent basis. The report shall quantify the number of jobs created by each of the Qualified Businesses or Qualified Rural Businesses (delineated by Colorado county and non-Colorado), the name of the business, the location of the business and the type of business (such as service, manufacturing and so on).

Such job creation report shall record jobs created after the investment of Certified Capital through the date that the CAPCO is no longer subject to regulation by the Office or the date that the investment has been fully repaid, whichever occurs first. Such job creation report should reflect net new jobs and should generally reflect more jobs than previously reported when making the SBA eligibility determination of Qualified Business or Qualified Rural Business, as applicable.

Annual Audit by an Independent Certified Public Accountant [Expired 5/15/07 per House Bill 07- 1167]

Annual Business Plan Review Meetings During each calendar year from 2003 to 2010, the Office shall hold a meeting in each of 5 counties that have populations of no more than 150,000 individuals at which a representative from each CAPCO shall be present to review business plans from Qualified Businesses Headquartered in those counties.

Schedule of Qualified Investments The aggregate cumulative amount of all Qualified Investments made by the CAPCO from an Allocation Date from each Specific Pool shall be considered in the calculation of the percentage requirements under the following “Schedule of Investments” section of “CONTINUING CERTIFICATION REQUIREMENTS” unless otherwise noted. Any proceeds, defined as cash for the purposes of the following “Schedule of Investments” section of “CONTINUING CERTIFICATION REQUIREMENTS”, received by the CAPCO from a Qualified Investment or from other uses may be invested in another Qualified Investment and shall be utilized to calculate the “Schedule of Investments” with respect to investments of Certified Capital unless otherwise noted. The date cash is placed in the business, as evidenced by the date of a check or other means of funds transfer, shall be the date utilized for determining if the Schedule of Qualified Investments has been met.

The CAPCO must meet specific time frames, percentages and requirements pertaining to Qualified Investments as follows:

1. Within the period ending 3 years after an allocation date for a Specific Pool, a CAPCO shall have made Qualified Investments cumulatively equal to at least 30% of the Certified Capital allocated to its Certified Investors for the Specific Pool on such allocation date. Although Qualified Distributions are allowed by the Statute in general, the 30% calculation herein shall not take into account any Qualified Distributions. A CAPCO, that received Certified Capital from the Statewide Pool allocation, shall be deemed to have invested $2 for every $1 invested in a Qualified Rural Business or a Qualified Business that has its Principal Business Operations located in a Distressed Urban Community and such $2 for $1 calculation shall be applied to the Specific Statewide Pool from which the Certified Capital was raised for investment in such businesses.

2. Within the period ending 5 years after an allocation date for a Specific Pool, a CAPCO shall have made Qualified Investments cumulatively equal to at least 50% of the Certified Capital allocated to its Certified Investors for the Specific Pool on such allocation date. Although Qualified Distributions are allowed by the Statute in general, the 50% calculation herein shall not take into account any Qualified Distributions. A CAPCO, that received Certified Capital from the Statewide Pool allocation, shall be deemed to have invested $2 for every $1 invested in a Qualified Rural Business or a Qualified Business that has its Principal Business Operations located in a Distressed Urban Community and such $2 for $1 calculation shall be applied to the Specific Statewide Pool from which the Certified Capital was raised for investment in such businesses.

3. A business that is classified as a Qualified Business or a Qualified Rural Business at the time of the first investment in said business by a CAPCO, when such investment occurs on or after May 27, 2004 shall remain classified as a Qualified Business or a Qualified Rural Business, as applicable, and may receive continuing investments from any CAPCO or any of its Affiliates. Such continuing investments, as long as they meet the Investment of Cash eligibility determination, shall be Qualified Investments even though such business may not meet the definition of a Qualified Business or a Qualified Rural Business, as applicable, at the time of such continuing investments except that:.

A. A business that is classified as a Qualified Business or Qualified Rural Business at the time of the first investment in said business by a CAPCO, when such investment occurs on or after May 27, 2004, but subsequently violates the requirement of section 10-3.5-103(11)(b)(I) or 11(c) within the first six months after such Qualified Investment, shall not be deemed to be a Qualified Business or a Qualified Rural Business, as applicable, and may not receive continuing investments from any Certified Capital Company or any of its affiliates. Additionally if this exception occurs, the Qualified Investment shall not be used in the 30% and 50% calculations described within this Schedule of Qualified Investments and the calculations described in 10-3.5-109(2)(a).

B. An investment in a business that relocates either its Headquarters or Principal Business Operations outside of Colorado after six months but less than three years after the initial Qualified Investment shall:

1. Not be deemed to satisfy a requirement of section 10-3.5-109 (2) (a) if such requirement has not already been complied with and if the relocation occurred during the Certified Capital Company's investment in the business; and 2. Be deemed to continue to satisfy a requirement of section 10-3.5-109 (2) (a) that has already been complied with and 10-3.5-107(1). In order to calculate such percentages, CAPCOs shall maintain separate records and separate tracking for each specific allocation of Certified Capital (for example, the Rural Pool, Statewide Pool, as applicable to each CAPCO).

DISTRIBUTIONS-REMITTANCE OF PROCEEDS 10-3.5-108 and 10-3.5-109 C.R.S.

Eligible Distributions 1. Before May 27, 2004:

A. A CAPCO may make reasonable Qualified Distributions at any time.

B. In order to make a Distribution occurring before May 27, 2004, out of Certified Capital to its Certified Investors on a particular Allocation Date other than reasonable Qualified Distributions which may be made at any time, a CAPCO shall have made Qualified Investments in an amount cumulatively equal to 100% of the Certified Capital allocated to its Certified Investors on such allocation date, except that a CAPCO may make repayments of principal and interest on its Indebtedness without any restriction whatsoever, including repayments of Indebtedness of the CAPCO on which Certified Investors earned Premium Tax Credits.

C. A CAPCO may make a Distribution at anytime to return any equity capitalization paid into the CAPCO before May 27, 2004 from any equity capitalization contributions paid into the CAPCO before May 27, 2004, proceeds or gains from Qualified Investments, or proceeds or gains from any other use of Certified Capital.

2. On or after May 27, 2004 and before the beginning of the tenth anniversary of an allocation date:

A. At any time, a CAPCO may make reasonable Qualified Distributions; may make Distributions to make repayments of principal and interest on its Indebtedness without any restriction whatsoever, including repayments of Indebtedness of the CAPCO on which Certified Investors earned Premium Tax Credits; may make payments on items specifically approved under the “Indebtedness exception” ; may make Distributions to pay any projected increase in federal or state taxes, including penalties and interest related to federal and state income taxes, of the equity owners of a CAPCO resulting from operations or ownership of the CAPCO without any restriction whatsoever; or may make Distributions to return any equity capitalization paid into the CAPCO before May 27, 2004 from any equity capitalization contributions paid into the CAPCO before May 27, 2004, proceeds or gains from Qualified Investments, or proceeds or gains from any other use of Certified Capital.

B. In order to make any other types of Distributions that have not been described in 2.A. in this

section out of proceeds or gains from Qualified Investments, proceeds or gains from any other use of Certified Capital, equity capitalization contributions paid into the CAPCO on or after May 27, 2004, or Certified Capital allocated to its Certified Investors on a particular Allocation Date, a CAPCO shall have made Qualified Investments in an amount to cumulatively equal to:

1. 100% of the Certified Capital allocated to its Certified Investors on such allocation date.

2. In order for initial and continuing Qualified Investments to count towards the 100% requirement described in 2.B.1. in this section, a business that is a Qualified Business or Qualified Rural Business at the time of the first investment by a Certified Capital Company in such business (when such investment occurred on or after May 27, 2004) shall not have violated the requirement for the business to maintain its headquarters and principal place of business in Colorado for at least six-months after the initial Qualified Investment or after it has relocated from another state [within ninety days after the finalization of the contract as described in 10-3.5-103(11)(b)(I)]. If the business violates these requirements, then the investment in such business shall not count towards the investment milestones contained in 10-3.5-107(1) and 10-3.5-109(2)(a) only and may not receive continuing investments from any CAPCO or any of its affiliates.

3. At least one-third of the Certified Capital allocated to its Certified Investors from the Statewide Pool in Qualified Businesses that are in the seed or early stage. For a CAPCO with only a Statewide Pool, a CAPCO shall make Qualified Investments equal to at least 1/3 of its Statewide Pool that are seed or early stage. For a CAPCO with both a Statewide and Rural Pool, seed or early stage Qualified Investments of Certified Capital from both pools shall count toward meeting the 1/3 of its Statewide Pool requirement. A CAPCO may exceed the 100% Qualified Investment requirement if it chooses to do so in order to make the required Qualified Investments in seed/early stage businesses equal to or greater than 1/3 of its Statewide Pool’s Certified Capital; however, this choice shall not affect the timeframe by which the 100% Qualified Investment requirement must be met.

C. In order to make any Distributions, a CAPCO shall have submitted the schedules described under “Schedules and Other Information” to the Office and calculated the amount of transfers identified in 10-3.5-108(3) utilizing either the annual internal rate of return calculation or the15% calculation method as further described in these regulations except as follows:

1. A CAPCO shall not be required to submit additional proposed Distribution review requests throughout the calendar year if the most recently submitted proposed Distribution amounts have not changed for any of the items (except for Qualified Distributions) described in 2.A. within this section. If Qualified Distributions change, a CAPCO shall not be required to submit the changes to the Office on a proposed basis throughout the calendar year. Eligibility of Qualified Distributions shall be reviewed by the Office during its Annual Review. However, a CAPCO shall be responsible for ensuring that it shall have sufficient cash remaining in the future to make required payments to the designated non-profit entities if future Distributions (including Qualified Distributions and Qualified Debt payments) are to be made.

2. A CAPCO shall not be required to submit additional proposed Distribution review requests for the Annual Review if the most recently submitted proposed Distribution amounts have not changed for any of the items (except for Qualified Distributions) described in 2.A. within this section and the most recently submitted proposed Distribution amounts reflect the actual Distributions as of the end of a CAPCO’s fiscal year end. Eligibility of Qualified Distributions shall be reviewed by the Office during its Annual Review. However, a CAPCO shall be responsible for ensuring that it shall have sufficient cash remaining in the future to make required payments to the designated non-profit entities if future Distributions (including Qualified Distributions and Qualified Debt payments) are to be made.

D. After completing the calculations required in 2.C. and as stated in this regulation, a CAPCO shall make the transfers to the entities as required in 10-3.5-108(3)(c) and (d).

3. On or after May 27, 2004 and beginning on the tenth anniversary of an allocation date, a CAPCO shall make no further Distributions of any kind, including Qualified Distributions, from Certified Capital or proceeds or gains from any type of investment of Certified Capital, unless and until the CAPCO has made Qualified Investments cumulatively equal to 100% of the Certified Capital allocated to its Certified Investors on such allocation date [the 100% includes the requirements listed in

section 10-3.5-108(2)(a)(I)]; except that this restriction on further Distributions shall not prohibit payments on Indebtedness of the CAPCO, including Indebtedness to Certified Investors, on qualified debt instruments, payments on items specifically approved under the “Indebtedness exception” or Distributions permitted by 10-3.5-108(2)(b).

Schedules and Other Information On or after May 27, 2004, equity holders may contribute additional equity to a CAPCO at anytime upon submittal of a certification by the CAPCO to the Office in writing that there is a legitimate business

purpose for the equity contribution which is not intended as a device for the purpose of reducing its internal rate of return (or otherwise avoiding or reducing required Distributions to the non-profit entities designated in the Statute).

Eligible Distributions, described in the above section, are for the purpose of determining what type of Distributions may be made and the potential timing of such Distributions. However, once a CAPCO has met the 100%/6 month/1/3 seed or early stage investment requirements, unless otherwise approved by the Office, a CAPCO shall make Distributions as soon as commercially reasonable. A CAPCO shall use the Eligible Distributions section described above and the Distribution Review-Remittance of Portion of Proceeds section to determine whether such Distributions impact the amount of funds, if any, required to be transferred to the non-profit entities designated in the Statute.

Before May 27, 2004, the information needed by the Office to perform the Distributions Review includes, but is not limited to, the following: schedule of all Distributions itemized by type of Distribution (with the exception of Qualified Distributions but including and not limited to, principal and interest payments with respect to Qualified Debt instruments); schedule of Qualified Investments; schedule of outflows of Certified Capital; and schedule of Additional Capital.

In addition on or after May 27, 2004, Distributions out of proceeds or gains from Qualified Investments, proceeds or gains from any other use of Certified Capital, proceeds or gains from equity capitalization contributions, equity capitalization contributions, Certified Capital allocated to Certified Investors on a particular allocation date, proposed Distributions, schedule of debt for unaffiliated entity/third party in an arms-length transaction, and schedule of debt to equity holders and related/affiliated entities shall be included on such schedules and shall specifically be examined when a CAPCO proposes to make a Distribution and as a part of the Annual Review.

Actual Distributions shall be verified against the schedules during each Annual Review. If the schedules submitted for the Annual Review are the same as the schedules previously submitted to the Office for prior calculations and no further Distributions are proposed, the Office will not need to make new calculations at that time.

Distributions Review 1. The Office shall review if the CAPCO has followed the requirements of the Statute and this regulation with regard to when Distributions can be made.

2. Upon the adoption of this regulation, the CAPCO shall submit to the Office complete schedules (which shall include future estimated amounts as described previously). Such schedules shall provide a cumulative record of the required information including specific dates on which transactions occurred (or shall occur) beginning with the Allocation Date for the Specific Pool of Certified Capital and continuing through the date of submittal. The CAPCO shall also have calculated the amount of transfers required.

Thereafter, the CAPCO shall submit to the Office complete schedules (which shall include future estimated amounts as described previously) when proposing to make a Distribution. Such schedules shall be submitted to the Office thirty days prior to a proposed Distribution and shall provide a cumulative record of the required information including specific dates on which transactions occurred (or shall occur) beginning with the Allocation Date for the Specific Pool of Certified Capital and continuing through the date of submittal. The CAPCO shall also have calculated the amount of transfers identified in 10-3.5- 108(3) utilizing either the internal rate of return calculation or the15% calculation method as further described in these regulations.

3. The Office shall verify that the CAPCO has calculated the appropriate reporting and transfer amounts within 30 days (date stamp for receipt by the Office required) of the CAPCO having submitted existing and/or proposed Distribution information to the Office using the procedures described in the Statute and this regulation. If the Office does not respond in 30 days, the existing and/or proposed Distribution and calculation shall be deemed to be approved by the Office.

4. The Office shall verify whether the annual rate of return (IRR) exceeds ten percent on the Certified Capital allocated to the Certified Investors of the CAPCO on such allocation date plus additional equity capitalization contributed to the CAPCO. When the Office verifies the IRR (also known as the discount rate), it shall specifically review whether the present value of the aggregate total of both cash and non-cash Distributions when combined with 10% of the Premium Tax Credits allocated on the Allocation Date to the Certified Investors and Utilized pursuant to the Statute equals the present value of the Certified Capital allocated to the Certified Investors of the CAPCO on the Allocation Date plus any additional equity capitalization of the CAPCO. The Office shall determine the amount of Distributions to be reported by applying a negative cash flow until the internal rate of return is reduced to 10%. The IRR calculation shall:

A. Not include Qualified Distributions and exempted items as stated in the definition of “Indebtedness”. In order for the Office to verify the exempted items (as stated in the definition of “Indebtedness” ), a CAPCO shall submit a certified statement signed by both the unrelated, unaffiliated entity/third party and the CAPCO stating that the transaction does not meet the definition of “Indebtedness”. Such certified statement shall be submitted to the Office for its concurrence prior to the CAPCO beginning to make payments related to such transaction and shall clearly delineate all payments to be made.

On a case-by-case basis, the Office will consider extending the “Indebtedness exception” to repayments of debt to equity holders (except for Qualified Debt instruments) and related/affiliated entities, will consider not defining the principal amount loaned as Indebtedness and will consider not including the principal amount loaned as a Distribution for the purpose of the IRR calculation.

However as approved on a case-by-case basis, interest and other forms of return (above and beyond the principal amount loaned) will not be defined as Indebtedness but shall be defined as a Distribution and shall be included in the IRR calculation for these type of transactions.

Additionally, this paragraph does not apply to Qualified Debt instruments (including payment of principal and interest) that will be included in the IRR calculation as specifically stated in the Statute. A CAPCO shall not convert equity to debt and use the exceptions provided in this paragraph—meaning that any such conversions shall be treated as equity for the purposes of the IRR calculations.

B. Include, without limitation, all Distributions out of proceeds or gains from Qualified Investments, Distributions out of proceeds or gains from any other use of Certified Capital, Distributions out of proceeds or gains from equity capitalization contributions, Distributions of equity capitalization contributions, and Distributions of Certified Capital allocated to Certified Investors on a particular allocation date, Distributions for repayment of principal and interest with respect to a CAPCO’s Indebtedness including repayments of Indebtedness of the CAPCO on which Certified Investors earned premium tax credits, Distributions to pay any projected increase in federal or state taxes of the equity owners of a Certified Capital Company resulting from operations or ownership of the CAPCO, Distributions for return of equity capitalization and all other Distributions.

C. Not include proceeds or gains from: Qualified Investments; any other use of Certified Capital; or equity capital contributions as equity capitalization contributed to the CAPCO but shall include Distributions from these sources of funds when made.

5. The CAPCO shall report to the Division of Housing in the Department of Local Affairs within thirty days of receiving notification from the Office the amount of money equal to twenty percent (unless the CAPCO fails to have made Qualified Investments cumulatively equal to 100% of the Certified Capital allocated to its Certified Investors on such allocation date as described in 10-3.5- 109(2)(a)(III) which will result in the amount to be reported to increase from 20% to the stated amount in this citation) of any further Distributions above the amount required to produce such 10% return minus any amounts reported and transferred previously under the 15% calculation method (described under #7 below).

The CAPCO shall make the transfers required pursuant to 10-3.5-108(3)(c) and (d). However, Distributions to pay any projected increase in federal or state taxes of the equity owners of a CAPCO resulting from operations or ownership of the CAPCO, Distributions to repay principal and interest on a CAPCO’s Indebtedness, including repayments of Indebtedness of the CAPCO on which Certified Investors earned premium tax credits, payments on items specifically approved under the “Indebtedness exception” or Distributions to return equity capitalization paid into the CAPCO before May 28, 2004, shall either be reported to the Division of Housing or accrued for reporting at a later date as determined by the Economic Development Commission. In no event shall this paragraph restrict a CAPCO’s ability to make repayments of Indebtedness, including making repayments of Indebtedness of the CAPCO on which Certified Investors earned premium tax credits.

6. For the Distribution that results in the IRR exceeding 10%, a CAPCO shall use the IRR calculation method (described under #4 and #5 above) for that portion of the Distribution that exceeds 10% and will use the15% calculation method (described under #7 below) for that portion of the Distribution resulting in an IRR of 10% or less.

7. If the internal rate of return determined in accordance with the Statute and these regulations does not exceed 10%, then the CAPCO shall submit a proposed Distribution request and the Office shall review the 15% calculation to determine if amounts will need to be reported and transferred.

The CAPCO shall report to the Division of Housing in the Department of Local Affairs within 30 days of receiving notification from the Office the amount of money equal to 15% of the proposed Distribution amount (or actual Distributions that have already occurred on or after May 27, 2004 for the initial review to take place upon the adoption of these regulations). However, this calculation shall not include Qualified Distributions or Distributions to pay any projected increase in federal or state taxes of the equity owners of a CAPCO resulting from operations or ownership of the CAPCO, or Distributions to repay principal and interest on a CAPCO’s Indebtedness, including repayments of Indebtedness of the CAPCO on which Certified Investors earned premium tax credits, payments on items specifically approved under the “Indebtedness exception” or Distributions to return equity capitalization paid into the CAPCO before May 28, 2004.

In order for the Office to verify items exempted under the definition of “Indebtedness” and thus not included as a Distribution for the purpose of the 15% calculations, a CAPCO shall submit a certified statement signed by both the unrelated, unaffiliated entity/third party and the CAPCO stating that the transaction does not meet the definition of “Indebtedness”. Such certified statement shall be submitted to the Office for its concurrence prior to the CAPCO beginning to make payments related to such transaction and shall clearly delineate all payments to be made.

On a case-by-case basis, the Office will consider extending the “Indebtedness exception” to repayments of debt to equity holders (except for Qualified Debt Instruments) and related/affiliated entities, will consider not defining the principal amount loaned as Indebtedness and will consider not including the principal amount loaned as a Distribution for the purpose of the 15% calculations. However as approved on a case-by-case basis, interest and other forms of return (above and beyond the principal amount loaned) will not be defined as Indebtedness but shall be defined as a Distribution and shall be included in the 15% calculation for these type of transactions. A CAPCO shall not convert equity to debt and use the exceptions provided in this paragraph—meaning that any such conversions shall be treated as equity for the purposes of the IRR calculations.

The CAPCO shall make the transfers required pursuant to 10-3.5-108(3)(c) and (d).

The CAPCO shall continue the 15% Distribution calculation until the internal rate of return exceeds 10%at that time the IRR calculation described in #4 and #5 above will be used to determine transfer amounts.

Amounts previously transferred shall be taken into consideration when determining the net amount of future transfers under the internal rate of return calculation.

8. The CAPCO shall submit a report to the Office of any and all reports and transfers made as directed by the Division of Housing in the Department of Local Affairs and the Executive Director of the Department of Human Services with all proposed Distribution review requests and within 90 business days of the CAPCO’s fiscal year end for review during the Annual Review.

Example — Distributions Review-Remittance of Proceeds XYZ, a venture capital firm, applies to the Office to become a CAPCO. XYZ has $500,000 in equity capitalization and meets all other application requirements. The Office notifies XYZ that its application for certification has been approved.

XYZ submits Premium Tax Credit Allocation Claim forms totaling $10,000,000 out of the 2002 Statewide Pool. The Office is able to allocate all $10,000,000 in Premium Tax Credits to XYZ’s Certified Investors.

Ten percent (10%) of the Premium Tax Credit Allocations are available for use in Years 2 through 11 (ten years). Within the required 5 business days, XYZ receives all $10,000,000 of Certified Capital from its Certified Investors. The Certified Capital received from Certified Investors is comprised of $10,000,000 in Qualified Debt at an interest rate of 7%. Qualified Debt payments in this example are based on payments being made by a CAPCO over a twelve-year period and include payments of cash and Premium Tax Credits. If a 12-year level and fully amortizing payment schedule is used, the Qualified Debt payments (amount of cash and Premium Tax Credits) will be different. XYZ makes tax Distributions annually in years 3 thru 10.

XYZ shall invest the $10,000,000 of Certified Capital in Qualified Businesses. By the end of year 6, XYZ has made Qualified Investments cumulatively equal to: 100% of the Certified Capital allocated to its Certified Investors and met the 6-month requirement, and at least one-third of the Certified Capital allocated to its Certified Investors under the Statewide Pool in Qualified Businesses that are in seed or early stage.

For the purposes of this example, the schedules contained in this section have been received within 90 business days of the CAPCO’s fiscal year end and report the following annual results:

In this example, the internal rate of return (IRR) and the Distributions are calculated annually at the end of each calendar year. However, calculations shall be made on a proposed Distribution and Annual Review

basis as described within this section. The CAPCO does not report any amount to the Division of Housing until year 6 in accordance with the Statute and regulations, since the only Distributions made prior to year 6 are Qualified Debt and Tax Distributions. Additionally in years 1 through 8, the IRR is less than 10% and there is no requirement to report any portion of the Qualified Debt and the Tax Distributions to the Division of Housing. As of the end of year 6, the CAPCO is assumed to have invested cumulative amounts in Qualified Businesses equal to 100% of the Certified Capital allocated to it and makes a onetime Distribution of the initial “equity capitalization” of $500,000 (made prior to May 27, 2004). On 12/31 in years 6, 7 and 8, XYZ makes “Other Distributions” to XYZ Equity Holders of $1,500,000. Since the IRR does not exceed 10% in years 6, 7, or 8, the basis for the calculation of the amount reported to the Division of Housing in the Department of Local Affairs is determined to be the “Other Distributions” only, which equals $225,000 for each year, computed as 15% of $1,500,000. No other Distributions are included in this amount due to the IRR being less than 10% for that year. Therefore, in year 8 the cumulative payments reported to the Division of Housing since the IRR is less than 10% equals $675,000 (3 times $225,000).

In year 9, XYZ makes an “Other Distribution” to XYZ Equity Holders in the amount of $1,500,000 and Qualified Debt and Tax Distributions totaling $1,595,466. When the IRR is calculated for that year, it equaled 11.62%. Since the IRR exceeds 10%, the Office then determines the basis for the calculation of the amount to be reported to the Division of Housing. The basis for year 9 is calculated by taking the total Distributions of $3,095,466 (not including Qualified Distributions) minus the Distributions needed to generate a 10% IRR ($1,167,000) which equals $1,928,466. The amount to be reported to the Division of Housing is $0, using the 20% calculation, $1,928,466 times 20% or $385,693 less $385,693 in credit due to XYZ for payments made in years when there were Distributions made and the IRR was less than 10%.

This results in an outstanding credit still due to XYZ of $289,307 ($675,000-$385,693). In year 10, XYZ makes an “Other Distribution” to XYZ Equity Holders totaling $1,500,000 and Qualified Debt and Tax Distributions totaling $1,595,466. When the IRR is calculated for that year, it equals 13.57%. Since the IRR exceeds 10%, the Office then determines the basis for the calculation of the amount to be reported to the Division of Housing. The basis for year 10 since the IRR exceeded 10% in year 9 is calculated by taking the total Distributions of $3,095,466 (not including Qualified Distributions). The amount to be reported to the Division of Housing is $329,786, using the 20% calculation is $3,095,466 times 20% or $619,093 less $289,307 in outstanding credit due to XYZ for payments made in years when there were Distributions made and the IRR was less than 10%. This results in no outstanding credit due to XYZ.

In year 11, XYZ makes an “Other Distribution” to XYZ Equity Holders totaling $1,500,000 and Qualified Debt and Tax Distributions totaling $1,000,000. When the IRR is calculated for that year, it equals 14.74%. Since the IRR exceeds 10%, the Office then determines the basis for the calculation of the amount to be reported to the Division of Housing. The basis for year 11 since the IRR exceeded 10% in year 9 is calculated by taking the total Distributions of $2,500,000 (not including Qualified Distributions).

The amount to be reported to the Division of Housing is $500,000, using the 20% calculation is $2,500,000 times 20% or $500,000, there was no outstanding credit due to XYZ for payments made in years when there were Distributions made and the IRR was less than 10%. In year 12, XYZ does not make an “Other Distribution” to XYZ Equity Holders, but does make Qualified Debt Distributions totaling $500,000. When the IRR is calculated for that year, it equals 14.93%. Since the IRR exceeds 10%, the Office then determines the basis for the calculation of the amount to be reported to the Division of Housing. The basis for year 12 since the IRR exceeded 10% in year 9 is calculated by taking the total Distributions of $500,000 (not including Qualified Distributions). The amount to be reported to the Division of Housing is $100,000, using the 20% calculation is $500,000 times 20% or $100,000, there was no outstanding credit due to XYZ for payments made in years when there were Distributions made and the IRR was less than 10%.

In the event that XYZ is proposing a Distribution that will cause the IRR to exceed 10% and the proposed Distribution includes Qualified Debt Distributions, Tax Distributions and “Other Distributions” , a CAPCO may make the Other Distributions first and calculate the amount to be reported to the Division of Housing using the 15% calculation method until the “Other Distributions” causes the IRR to be 10%. Once the IRR is 10%, the CAPCO shall use the IRR/20% calculation method for the remainder of the “Other Distributions” , Qualified Debt Distributions, and Tax Distributions to determine the total amount to be reported to the Division of Housing. In this type of situation only, a CAPCO may have a portion of its proposed Distribution amount reported to the Division of Housing from the 15% calculation plus a portion from the 20% calculation. In all other cases, only one calculation method shall be used.

Such Distributions Review shall continue on a proposed Distribution review basis and an Annual Distribution Review basis as described within these regulations.

NOTE: Internal Rate of Return calculations are computed using a Microsoft Excel spreadsheet with the Analysis Tool Pak — VBA and the XIRR formula.

ANNUAL REVIEW-DECERTIFICATION-PENALTIES 10-3.5-109 C.R.S.

The Office shall conduct an Annual Review of each CAPCO to determine whether the CAPCO is abiding by the requirements of certification, to advise the Certified Capital Company as to the eligibility status of its Qualified Investments, and to ensure that no investment has been made in violation of the Statute and this regulation.

Additional program information will be reviewed as needed. The cost of the Annual Review shall be paid by each CAPCO according to a reasonable fee schedule adopted by the Office. Upon completion of its review, the Office shall send an invoice for the Annual Review to the CAPCO. The total invoiced amount shall include the number of billable hours associated with the Annual Review and the Annual Review report. The billable hourly rate shall be $50 per hour. Payment shall be due within 30 business days from the date of the invoice. Payment shall be made by certified, cashier’s check, or company check.

Decertification-Penalties 2. Any material violation before May 27, 2004, of the Statute and CONTINUING CERTIFICATION REQUIREMENTS contained in this regulation shall be grounds for decertification of a CAPCO.

The Office shall decertify CAPCOs in accordance with 10-3.5-109(1)-(4), C.R.S. and 10-3.5- 109(6)-(7).

3. On or after May 27, 2004, the Office shall review the CAPCOs in accordance, but not limited to, with 10-3.5-109(1-7) and 10-3.5-107, C.R.S. as amended.

4. On or after May 27, 2004, any material violation of 10-3.5-107, C.R.S. shall be grounds for decertification of the CAPCO as specifically described in 10-3.5-109, C.R.S. and/or assessment of an administrative fine(s) to be determined by the Office as described in 10-3.5-109, C.R.S. and utilizing the schedules describe below.

A. Material violations of 10-3.5-107 C.R.S. that would be grounds for decertification of the CAPCO are not making Qualified Investments as required by 10-3.5-107(1) and 10-3.5- 107(4) C.R.S.

B. Violations involving an unauthorized use of funds under this article shall require the repayment or reinvestment of the funds plus a fine not to exceed the amount of funds involved.

Such violations would involve misuse of funds under 10-3.5-107(6) C.R.S.

C. Violations not involving an unauthorized use of funds under this article may be assessed a fine not to exceed $25,000 for the first violation, which may increase by $25,000 for each additional violation not to exceed $100,000. If the fine reaches the $100,000 level, then the fine amount will always be $100,000 going forward. Such violations would involve non-compliance with 10-3.5-104(2)(d), 10-3.5-104(6), 10-3.5-107(7)(b), (c), (d) and (e), and 10-3.5-108 C.R.S.

D. If the Office determines that a CAPCO is not in compliance with the requirements contained in A., B. or C. of this section, the CAPCO may be subject to decertification and/or the assessment of a fine 120 days after the date of mailing of the notice of deficiencies (to officers of the CAPCO) unless the deficiencies are corrected and the CAPCO is again in compliance with all requirements of certification.

E. At the end of the one-hundred-twenty-day period described in D. and if the Certified Capital Company is still not in compliance with the requirements that were the subject of the notice of deficiency(ies), the Office may do the following:

1. Send a notice of decertification to the CAPCO and to all other appropriate state agencies, including without limitation the division of insurance in the department of regulatory agencies for a violation of 10-3.5-107(1) and 10-3.5-107(4). The Office shall also send written notice to the address of each Certified Investor whose premium tax credit has been subject to recapture or forfeiture, using the address shown on the most recent premium tax filing. The Office shall have the

authority to waive any recapture or forfeiture of credits if, after considering all facts and circumstances, it determines that such waiver will have the effect of furthering the economic development of the state 2. Assess an administrative fine as described in B. and/or C. against the CAPCO. The assessment shall occur only after the director of the Office holds a hearing in accordance with section 24-4-105, C.R.S. Judicial review may be obtained in the court of appeals pursuant to section 24-4-106 (11), C.R.S. The Office shall transfer any such fine that it receives to the state treasurer, who shall credit it to the general fund.

CAPCO No Longer Subject To Regulation By Office A CAPCO shall no longer be subject to regulation by the Office except insofar as is necessary to oversee the Distributions made pursuant to 10 3.5 108 (3) (b), C.R.S. if the following requirements have been met:

A. A CAPCO has invested an amount cumulatively equal to one hundred percent of its Certified Capital in Qualified Investments. Although the Statute allows Qualified Distributions in general, the 100% calculation herein shall not take into account any Qualified Distributions;

B. A CAPCO has invested an amount cumulatively equal to at least one-third of the Certified Capital allocated to its Certified Investors from the Statewide Pool in Qualified Businesses that meet the definition of “Seed or Early Stage”. Seed or Early Stage investments of Certified Capital from the Statewide Pool and the Rural Pool (if applicable) shall both count toward meeting this requirement;

C. All Qualified Businesses funded by a CAPCO have maintained their Headquarters and Principal Business Operations/principal place of business in Colorado for at least six-months after the first Qualified Investment has been made if the business was located in Colorado at the time of the investment or for at least six-months after the business relocated to Colorado from another state.

If the Business’ has not met the six month requirement, then this investment will not be included in the 100% calculation required in 1.A. above;

D. Completion of the final Annual Review [except for oversight of Distributions pursuant to 10-3.5- 108(3)(b) C.R.S.] will be initiated after confirming that the CAPCO has achieved its investment requirements of one hundred percent/six-month/one-third seed-early stage. The Office will complete its Final Annual Review within 6 months of a CAPCO submitting all required reports/audits per the Statute and this regulation and upon the CAPCO notifying the Office by Certified Mail With Receipt of its request for a Final Annual Review by the Office; and E. Submittal of the CAPCO’s final Annual Audit by an Independent Certified Public Accountant and any other final reports and satisfactory review by the Office.

Material Determination In all cases, the Office reserves the right to determine the materiality of a requested item unless such item has specifically been addressed in the Statute or this regulation.

Use, Transfer and/or Sale of Premium Tax Credits Due to the “estimated” nature of quarterly tax payments, Premium Tax Credits may only be used on an annual basis against actual Premium Tax Liabilities. Premium Tax Credits may first be used for the March payment that is due in 2004, with regard to the actual tax liability for the calendar year 2003.

The Premium Tax Credits, established pursuant to the Statute for this program, may be transferred or sold. A transfer or sale shall not affect the time schedule for taking the Premium Tax Credit as provided in the Statute in 10-3-5.105, C.R.S.

1. Premium Tax Credits earned by a Certified Investor pursuant to 10-3.5-106, C.R.S. (the “Certified Investor” or “Transferor” ) may be transferred or sold in whole or part to one or more insurance companies (the “Transferee” ) that are subject to the State of Colorado’s Premium Tax.

2. Transfer or sale of Premium Tax Credits, whether by the original investor or a re-sale by a Transferee, shall only be made once per calendar year and shall occur no later than December 31st of each calendar/tax year in order to be valid for Premium Taxes related to such calendar/tax year ending December 31st which are subsequently due on March 1st of the following calendar/tax year.

In the event of a change in ownership or control of the holder of Premium Tax Credits, transfers of such Premium Tax credits to a new owner may occur without being subject to the once per calendar year limitation except that such transfers shall occur no later than December 31st of each calendar/tax year in order to be valid for Premium Taxes related to such calendar/tax year ending December 31st which are due on March 1st of the following calendar/tax year.

3. The format of all transfer or sale documents shall be approved by the Office. Any Premium Tax Credits recaptured pursuant to section 10 3.5 109, C.R.S. shall be the liability of the taxpayer who actually claimed the Premium Tax Credits. The “taxpayer who actually claimed the Premium Tax Credits” shall refer to each taxpayer, whether a Certified Investor or a subsequent Transferee, who has used a Premium Tax Credit to reduce its state premium tax liability in any tax year.

Since any Premium Tax Credits recaptured pursuant to 10 3.5 109, C.R.S. shall be the liability of the taxpayer who actually claimed the Premium Tax Credits, the Office shall require that the Transferee be actively licensed and in compliance with all licensing requirements, including minimum net worth requirements, as set forth by the State of Colorado to conduct such insurance business. 4 . All owners of Premium Tax Credits (Certified Investor or Transferees) shall submit an Annual Report to the Office in a format provided by the Office, with a copy to the Colorado Division of Insurance, no later than January 31st of each year (for the previous calendar/tax year) which provides details on the following information broken out by each Specific Pool:

1. owner’s initial Premium Tax Credits delineated by initial year of eligibility;

2. amount of Premium Tax Credits transferred or sold and the years to which such transfer or sale applies;

3. the sale price of such Premium Tax Credits transferred or sold;

4. name, address, and Insurance Tax Identification Numbers for the owner and the Transferee;

5. the date of such transfers or sales;

6. the amount of Premium Tax Credits taken against Colorado Premium Tax liability to date delineated by tax year;

7. the first date that the Premium Tax Credits could be taken by the owner;

8. the owner’s remaining Premium Tax Credit balance;

9. carryforward tax credits and the related year; and 10) other information as requested by the Office.

EXHIBIT A

COLORADO OFFICE OF ECONOMIC DEVELOPMENT & INTERNATIONAL TRADE (Office)

PRE-EXISTING QUALIFIED INVESTMENT AS SEED/EARLY STAGE INVESTMENT CERTIFICATION

FOR THE 2002 POOL

Seed or early stage, in reference to a Qualified Business, means that the Qualified Business, at the time of the initial Qualified Investment, either: (please check which of the below situation(s) were true at the time of the initial Qualified Investment) 1)______ Had less than five hundred thousand dollars in total revenues for the fiscal year immediately preceding the initial Qualified Investment; (please supply audited financials if possible, business’ financials if audited financials are not available) 2)______ Has received no more than one investment from a professional venture capital firm with funds raised from institutional investors; or (please supply detailed summary of the equity section of the financials) 3)______ Does not have positive operational cash flow for the fiscal year immediately preceding the initial Qualified Investment. (please supply audited financials if possible, business’ financials if audited financials are not available)

I do hereby certify that we have read and understand the above statement and that this information and documentation supplied to the Colorado Office of Economic Development & International Trade for review is true and accurate. _________________________________________________________________________ Editor’s Notes

History Annotations The rule section entitled “Annual Audit by an Independent Certified Public Accountant” (adopted 09/15/ 2006) was not extended by House Bill 07-1167 and therefore expired 05/15/2007.

8 CCR 1501-3 Issuance of Premium Tax Credits Relating to Covercolorado Contributions {#sec-8-ccr-1501-3 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-3}

OFFICE OF THE GOVERNOR

Office of Economic Development and International Trade ISSUANCE OF PREMIUM TAX CREDITS RELATING TO COVERCOLORADO CONTRIBUTIONS 8 CCR 1501-3 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________

STATEMENT OF BASIS AND STATUTORY AUTHORITY

These rules implement the premium tax credits for contributions to CoverColorado pursuant to 10-8-534, a new section added to Part 5 of article 8 of title 10 of the Colorado Revised Statutes.

This program was created by the Colorado State Legislature during the 2004 Legislative Session. The primary purpose of this program is to issue a dollar for dollar premium tax credit to insurance companies that make cash contributions to CoverColorado thereby providing an incentive for such contributions to be made. Any contributions received by CoverColorado as a result of this tax credit program will assist in funding operating costs for the CoverColorado health insurance program. Insurance companies that make cash contributions pursuant to this program will be eligible to receive a dollar for dollar Tax Credit Certificate that can be used to offset premium taxes due to the State of Colorado. The Office is authorized to issue Tax Credit Certificates in an aggregate amount of up to $5,000,000 (five million dollars) per year pursuant to this program or if S.B. 04-106 is declared to be unconstitutional by a final judgment that invalidates the tax credits enacted by such bill, to issue up to $10,000,000 (ten million dollars) of tax credits.

PURPOSE OF REGULATION

This regulation implements the process by which premium tax credits for contributions to CoverColorado shall be allocated pursuant to 10-8-534, C.R.S. in which the Statute requires that the Colorado Office of Economic Development promulgate such regulation. This regulation clarifies certain definitions and provides for new definitions as needed. It describes the procedure by which an insurance company submits an irrevocable offer to make a qualifying, cash contribution to CoverColorado in exchange for a premium tax credit. It details the process for an insurance company making such an offer, the process for applying to receive a tax credit certificate, including the deadlines and dates relating to such processes.

By promulgating this regulation, the Colorado Office of Economic Development will increase public access to information, public participation in the formulation of administrative policy and procedures, and increase public accountability of the Colorado Office of Economic Development.

DEFINITIONS

The following language provides definitions for terms provided under 10-8-534, C.R.S. that were utilized in the Statute for this program and provides new definitions, both of which are necessary for the implementation of the program by the Office of Economic Development. The following words and terms shall have the meanings provided herein, unless the context clearly indicates otherwise.

“Allocation Notice” is issued by the Office and lists the amount of proposed tax credits an insurance company is allocated and the Contribution Deadline.

“Applicant” is an insurance company that submits an Application for Tax Certificate to the Office on or before the Application Due Date, but no earlier than the date of an Allocation Notice or a Waiting List Notice.

“Application” means an Application for Tax Certificate.

“Application Due Date” means on or before November 1, 2004 and on or before the first working day of November for years 2005 through 2013.

“Application for Tax Certificate” means an original paper copy form as prescribed by the Office and submitted by an insurance company on or before the Application Due Date to the Office.

“Board” means the CoverColorado Board of Directors.

“Contribution Deadline” means the date by which an insurance company must make the cash contribution to CoverColorado. This date is indicated on the Allocation Notice. The first Contribution Deadline shall be on or before November 15, 2005. Subsequent Contribution Deadlines shall be on or before November 15th (or the first working day to occur after November 15th) of the subsequent years.

“Cure Period” means the fifteen (15) days that an insurance company has to cure its default and make the required cash contribution to CoverColorado. Such Cure Period ends fifteen (15) days from the postmark date of the Default Notice.

“Day” means a calendar day as in seven days in a week.

“Default Notice” is sent by the Office within three (3) working days following the Contribution Deadline to any insurance company that fails to make the required cash contribution when due.

“Document” means Document of Offers and Proposed Allocations.

“Document of Offers and Proposed Allocations” means a written list of all Irrevocable Offers, Proposed Allocations, and Waiting List.

“Irrevocable Offer” is a commitment to contribute cash to CoverColorado made by an insurance company. Such offer is contingent only upon the Office’s issuance of an Allocation Notice to the insurance company.

“Offer” means an Irrevocable Offer.

“Offer Acceptance Period” means from September 13, 2004 through October 12, 2004 and the second Monday in September through the first working day to occur thirty (30) calendar days from the second Monday in September for years 2005 through 2013.

“Office” is the Office of Economic Development created in section 24-48.5-101, C.R.S.

“Proposed Allocation” means the amount of tax credits proposed to be allocated to an insurance company by the Office.

“Qualified Taxpayer” means an insurance company that has met all the requirements of 10-8-534 (3), C.R.S. as determined by the Office.

“Reallocation Contribution Deadline” means the date by which an insurance company must make the cash contribution to CoverColorado. This date is indicated on the Reallocation Notice. The first Reallocation Contribution Deadline shall be on or before December 12, 2005.

“Reallocation Notice” is issued by the Office and indicates the amount of proposed tax credits that have been reallocated to an insurance company. Such Reallocation Notice shall also indicate the Contribution Deadline relating to the reallocated tax credits.

“Statute” means 10-8-534, C.R.S.

“Tax Credit Certificate” is a certificate issued by the Office to a Qualified Taxpayer indicating the amount of tax credits that the insurance company may claim and the tax year to which the credit may be applied.

“Waiting List” is the status of an insurance company that submitted an Irrevocable Offer, but did not receive a tax credit allocation because the tax credits were oversubscribed.

“Waiting List Notice” is issued by the Office and indicates that the insurance company is on the Waiting List to receive a tax credit allocation.

“Working Days” means a business day in which the Colorado Office of Economic Development is open for normal business. A business day shall begin at 8:30AM Mountain Standard Time or Mountain Daylight Time, as applicable, and shall end at 5:00PM Mountain Standard Time or Mountain Daylight Time, as applicable.

COVERCOLORADO TAX CREDITS 10-8-534, C.R.S.

Submission of an Irrevocable Offer An insurance company seeking to receive a dollar-for-dollar premium tax credit in exchange for a cash contribution to CoverColorado, shall submit an Irrevocable Offer to make a cash contribution to CoverColorado. Such Irrevocable Offer is contingent only upon the Office’s issuance of an Allocation Notice to the insurance company. The Irrevocable Offer shall be made on a specific form to be prescribed by the Office.

Included on the Irrevocable Offer form shall be: 1) the address, phone number and contact information for the insurance company; 2) the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company; 3) a description of the insurance company’s legal structure; 4) the amount of cash that the insurance company commits to contribute to CoverColorado; 5) a statement estimating the premium tax liability the insurance company will owe to the State of Colorado for the tax year in which the cash contribution to CoverColorado shall be made; and 6) a statement self-certifying that the insurance company is in good standing within the State of Colorado.

The Irrevocable Offer shall be signed by an officer of the company with the authority to sign such a document. Appropriate documentation from the insurance company evidencing the authority of the person signing shall be submitted to the Office with the Irrevocable Offer. For example, if the insurance company were a corporation, a fully executed board resolution (authorizing the President of the company to sign binding documents and stating who the President is) would be acceptable signature authorization documentation.

1. An original paper copy of the Irrevocable Offer shall be filed with the Office. No other form (such as email or facsimile) of the Irrevocable Offer will be accepted.

2. The Irrevocable Offer form may be obtained directly from the Office in paper copy format, by e-mail with an attached Word file or by accessing the Office’s website at www.state.co.us/oed under the “Business Development and Finance” section and under the heading “CoverColorado Premium Tax Credits” .

3. All insurance companies shall fully complete, execute, and file such Irrevocable Offer with the Office during the Offer Acceptance Period. The Offer Acceptance Period shall begin no earlier than 8:30AM on September 13, 2004 and shall end on October 12, 2004 no later than 5:00PM Mountain Standard Time or Mountain Daylight Time. Offers submitted prior to the beginning of the Offer Acceptance Period (whether by hand delivery or otherwise) shall be considered received on September 13, 2004. Offers submitted after 5:00PM on the last day of the Offer Acceptance Period may be accepted by the Office at its discretion.

4. An offer shall be deemed filed with the Office when the Office receives one original Irrevocable Offer including originally executed page(s). Offers shall either be hand delivered with signature of receipt required, delivered by courier or expedited mail service, or sent via certified mail with signature of receipt required. The Offer must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202. The Office shall stamp all Offers with the date and time of receipt.

5. Pertaining to years 2005 through 2013, Irrevocable Offers shall be accepted in the same manner as described above. All insurance companies shall fully complete, execute, and file an Offer during the Offer Acceptance Period which shall begin no earlier than 8:30 AM on the second Monday in September and shall end no later than 5:00 PM on the first working day to occur thirty (30) calendar days from the second Monday in September Mountain Standard Time or Mountain Daylight Time, as applicable. Offers submitted prior to the beginning of the Offer Acceptance Period (whether by hand delivery or otherwise) for that year, shall considered received on the first day of the Offer Acceptance Period. Offers submitted after 5:00PM on the last day of the Offer Acceptance Period for that year may be accepted by the Office at its discretion.

Review of Irrevocable Offer The Office shall review all Irrevocable Offers submitted for completeness. The Office shall notify the insurance company in writing of any missing information. If the Office has requested additional information, the Offer shall be treated as having been received on the date originally submitted only if the insurance company submits the additional information within three (3) working days after the date of the Office=s written request. If all information is not received within the time frame stated herein, the Offer shall be deemed withdrawn and the Office shall have no obligation to provide additional notices to the insurance company.

Determination of Proposed Allocation Within three (3) working days after the last day of the Offer Acceptance Period, the Office shall determine a Proposed Allocation based on the date order that an insurance company made an Irrevocable Offer until the Office has allocated up to five (5) million dollars of tax credits per year, or if S.B. 04-106 is declared to be unconstitutional by a final judgment that invalidates the tax credits enacted by such bill, until the Office has allocated up to ten (10) million dollars of tax credits. All Offers submitted on the same day shall be considered equally regardless of the time of day the Offer is submitted.

If the total of the Irrevocable Offers received on the first day is less than the maximum amount of tax credits available for allocation, then the Office shall make Proposed Allocations in the full amount of the Offers submitted. The Office shall then determine the amount of tax credits available on the next day by subtracting all Proposed Allocations from the first day from the maximum tax credits to be allocated. This process shall continue until the Proposed Allocations total the maximum amount of tax credits to be allocated.

If the total of the Irrevocable Offers received on any day is greater than the amount of tax credits available for allocation on that day, then the Office shall make Proposed Allocations on a pro rata basis. The pro rata allocation shall be based upon the relation the company’s Offer has to the total amount of Offers received on that day times the amount of tax credits available for allocation on that day.

The following example illustrates how the proposed tax credits would be allocated if the total tax credits available were five (5) million dollars and if the following Irrevocable Offers were submitted:

Company Name Date/Time Received Offer Cumulative Offers Company A Sept. 13th 10:00A.M. $1,000,000 $1,000,000 Company B Sept. 13th 11:00A.M. $1,000,000 $2,000,000 Company C Sept. 13th 4:30P.M. $1,000,000 $3,000,000 Company D Sept. 15th 9:30A.M. $ 500,000 $3,500,000 Company E Sept. 22nd 11:30A.M. $1,000,000 $4,500,000 Company F Sept. 22nd 4:00P.M. $2,000,000 $6,500,000 Company G Oct. 12th 9:00A.M. $1,000,000 $7,500,000 On September 13th, the total of the Irrevocable Offers received is less than the amount of tax credits available for allocation, so the Office shall make Proposed Allocations in the full amount of the Offers submitted: Company A - $1,000,000; Company B - $1,000,000; Company C - $1,000,000. The Office will then determine the amount of tax credits available on the next day by subtracting all Proposed Allocations from the first day from the maximum tax credits to be allocated $5,000,000 - $3,000,000 = $2,000,000. On September 15th, only one Offer for $500,000 was received. Since the Offer is less than the amount of tax credits available for allocation of $2,000,000, the full $500,000 is the Proposed Allocation for Company D. The amount of tax credits available on the next day would be $2,000,000 - $500,000 = $1,500,000. The next day that Offers were received was September 22nd. On September 22nd, Offers totaling $3,000,000 were received. Because the total of the Irrevocable Offers received of $3,000,000 is greater than the amount of tax credits available for allocation of $1,500,000, the Office shall make Proposed Allocations on a pro rata basis as follows:

Company E $1,000,000 / $3,000,000 x $1,500,000 = $ 500,000 Company F $2,000,000 / $3,000,000 x $1,500,000 = $1,000,000 Total Credits Allocated $1,500,000 On October 12th, an Offer was received in the amount of $1,000,000 from Company G. Because the amount of tax credits available for allocation on that day is zero, the amount of Proposed Allocation for Company G is zero. If the Proposed Allocation for a company is zero, the company shall be placed on the Waiting List.

The Office reserves the right to round up or down within $1.00 at its discretion in allocating tax credits.

Acceptance of Offers, Proposed Allocations, and Waiting List Within three (3) working days after the last day of the Offer Acceptance Period, the Office shall compile a Document of Offers and Proposed Allocations and shall hand deliver such Document to the Board for review and acceptance. The Document shall contain the name of the insurance company making the Offer, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date and time the Offer was received, the amount of the Offer, the Proposed Allocation Amount, and the Waiting List of companies not receiving an allocation.

Within three (3) working days after the Office has submitted the Document to the Board, the Board shall hand deliver such Document marked “Accepted” to the Office.

By accepting the Document of Offers and Proposed Allocations the Board acknowledges that the Office may reallocate any tax credits that become available to those companies that appear on the Waiting List as described herein.

Allocation Notice Within two (2) working days after the Office receives the “Accepted” Document of Offers and Proposed Allocations, the Office shall send an Allocation Notice by certified mail with signature of receipt required to each insurance company to which the Office proposes to issue a Tax Credit Certificate.

The Allocation Notice issued by the Office shall specify: 1) the address, phone number and contact information for the insurance company; 2) the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company; 3) the amount of cash contribution that the insurance company committed to contribute to CoverColorado in its Irrevocable Offer; 4) that the CoverColorado Board has reviewed and accepted the offer; 5) the amount of proposed tax credits the Office has allocated to the insurance company; 6) the amount of contribution that the insurance company must make to CoverColorado in order to receive such tax credits (equal to the amount of tax credits allocated to the company); 7) the Contribution Deadline date by which the insurance company must make the cash contribution to CoverColorado; and 8) the default and cure provisions of 10-8-534 (4) (a), C.R.S. The Allocation Notice shall also give specific instruction on how the insurance company is to make its cash contribution to CoverColorado and shall require the submission of contribution documentation to the Office.

Waiting List Notification Insurance companies that submitted an Offer, but did not receive a Proposed Allocation, shall be placed on the Waiting List. The Office shall send a Waiting List Notice to such companies within two (2) working days after the Office receives the “Accepted” Document of Offers and Proposed Allocations from the Board.

Application for a Tax Credit Certificate On or before November 1, 2004, and on or before each Application Due Date thereafter through 2013, any insurance company that received an Allocation Notice or a Waiting List Notice from the Office during that calendar year shall be considered eligible and shall submit an Application for Tax Certificate to the Office.

If an eligible insurance company does not submit an Application for Tax Certificate on or before the Application Due Date, then the Office reserves the right to reallocate the tax credits originally allocated to the insurance company.

The Application shall be on a form prescribed by the Office and shall provide information necessary to determine if the Applicant will be qualified to receive a tax credit certificate pursuant to 10-8-534 (3), C.R.S.

1. An original paper copy of the Application shall be filed with the Office. No other form (such as e-mail or facsimile) of the Application will be accepted.

2. The Application form may be obtained directly from the Office in paper copy format, by e-mail with an attached Word file or by accessing the Office’s website at www.state.co.us/oed under the “Business Development and Finance” section and under the heading “CoverColorado Premium Tax Credits” .

3. All eligible insurance companies shall fully complete, execute, and file such Application with the Office no later than 5:00PM Mountain Standard Time or Mountain Daylight Time, as applicable, on the Application Due Date. Applications submitted after 5:00PM, shall not be considered submitted and will be returned to the sender.

4. An Application shall be deemed filed with the Office when the Office receives one original Application including originally executed page(s). Applications shall either be hand delivered with signature of receipt required, delivered by courier or expedited mail service, or sent via certified mail with signature of receipt required. The Application must be delivered to the Office of Economic Development located at 1625 Broadway, Suite 1700, Denver, CO 80202. The Office shall stamp all Applications with the date and time of receipt.

5. Pertaining to years 2005 through 2013, Applications shall be accepted in the same manner as described above. Such Applications shall be due to the Office on the first working day of November (the Application Due Date) of the respective year.

The Office shall review all Applications submitted for completeness. Within two (2) working days of the submission of Applications, the Office shall notify the insurance company in writing of any missing information. If the Office has requested additional information, the Application shall be treated as having been received on the date originally submitted only if the insurance company submits the additional information within three (3) working days after the date of the Office=s written request. If all information is not received within the time frame stated herein, the Application shall be deemed withdrawn and the Office shall have no obligation to provide additional notices to the insurance company.

Notification of Cash Contribution Received On the second working day following the date by which the cash contributions were due to CoverColorado (the Contribution Deadline), CoverColorado shall hand deliver a notification of cash contributions received to the Office. The notification shall be in list form and include the name of the insurance company, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date the contribution was made, and the amount of contribution.

On the day received, the Office shall review the notification of contributions received. Any insurance company that is not listed, but that received an Allocation Notice from the Office, or any insurance company that is listed, but did not make the amount of cash contribution as required on the Allocation Notice shall be considered in default per 10-8-534 (4) (b) (I), C.R.S. Within one working day of receipt of the notification list, the Office shall send a written notice of default by certified mail with signature of receipt required to any insurance company in default. Such notice shall outline that the insurance company has fifteen (15) days to cure the defect and that the fifteen days shall begin on the date the notice is postmarked (for example, November 18, 2005).

On the first working day following the fifteen day cure period (for example, December 5, 2005), CoverColorado shall hand deliver a notification of cash contributions received to the Office. The notification shall include the name of the insurance company, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date the contribution was made, and the amount of contribution.

If the cash contribution is not received by the end of the fifteenth day, the insurance company’s Offer shall be deemed withdrawn, the insurance company shall immediately forfeit any right to claim the tax credits originally allocated it, and the Office shall have no obligation to provide additional notices to the insurance company.

Determination of Qualified Applicants The Office shall determine if an insurance company is qualified to receive a Tax Credit Certificate for that year. In order to establish qualification, the Office must determine if: 1) the insurance company has made a timely and Irrevocable Offer to the Board to make a specified contribution of cash to CoverColorado; 2) the insurance company’s Offer was accepted by the Board; 3) the insurance company received an Allocation Notice from the Office; and 4) the insurance company made the timely contribution of cash to CoverColorado when due equal to the amount of tax credit allocation the company received.

Issuance of Tax Credit Certificates After the Office has determined that the Applicant is qualified to receive a tax credit, the Office shall issue a Tax Credit Certificate in a format prescribed by the Office. The Tax Credit Certificate shall be sent via certified mail with signature of receipt required to the Qualified Taxpayer before the last day of the tax year for which the credit applies.

Such Tax Credit Certificate shall specify 1) the amount of money that the insurance company may claim as a tax credit (such amount shall be equal to the cash contribution to CoverColorado); 2) the tax year to which the tax credit shall be applied; and 3) the calendar year in which the tax credit may first be used.

If the Office determines that an Applicant is not qualified to receive a tax credit, the Office shall send a written notification via certified mail with signature of receipt required before the last day of the tax year for which the credit would have applied.

Reallocation of Tax Credits Available due to Undersubscription, Default or Withdrawal During any Offer Acceptance Period, if the Office does not receive Irrevocable Offers totaling the full amount of the tax credits available for allocation, the Office reserves the right to allocate the amount of available tax credits (tax credits not allocated).

If there are tax credits that become available due to an Applicant not qualifying to receive a tax credit or due to an Application being withdrawn, the tax credits shall be reallocated to companies on the Waiting List on the second (2nd) working day immediately following the end of the default Cure Period (for example, December 2, 2005). On the day of reallocation, the Office shall send a Reallocation Notice to such companies by certified mail with signature of receipt required with a Reallocation Contribution Deadline of seven (7) days from the date of the Reallocation Notice (for example, December 12, 2005).

On the first working day following the Reallocation Contribution Deadline for reallocated tax credits, CoverColorado shall hand deliver a notification of contributions received to the Office. The notification shall include the name of the insurance company, the Insurance Premium Tax Identification Number issued by the National Association of Insurance Commissioners to the insurance company, the date the contribution was made, and the amount of contribution.

The Office shall use the same procedure outlined previously to determine if an insurance company receiving reallocated tax credits is qualified to receive a Tax Credit Certificate. The Office shall use the same procedure outlined previously to issue a Tax Credit Certificate to such a qualified insurance company and to issue a written notification to an insurance company that is not qualified to receive a tax credit.

If there are tax credits that become available due to an undersubscription of Offers, due to an Applicant not qualifying to receive a tax credit, or due to an Application being withdrawn, and if there are no companies on the Waiting List, then the Office reserves the right to reallocate the amount of available tax credits (tax credits not allocated).

The procedures outlined in this rule for the submission of information and documents relating to this program shall be applied to the reallocation of tax credits.

Use of the Premium Tax Credits An insurance company may claim the credit by submitting the Tax Credit Certificate issued by the Office along with its taxpayer return. The credit allowed by this program shall be an amount equal to one hundred percent of the total amount of the insurance company’s qualifying contribution to CoverColorado made during the tax year for which the credit is claimed.

If the amount of the credit allowed is greater than the amount of premium taxes due in the tax year for which the credit is being claimed, the credit not used as an offset may be carried forward for up to ten years. Any credit remaining after the ten-year period shall not be refunded or credited to the taxpayer.

Notification To The Commissioner Of Insurance On or before January 1 following the respective Application deadline defined above, the Office shall certify to the Commissioner of Insurance the insurance companies who are qualified to receive premium tax credits pursuant to this program, the amount of premium tax credit each taxpayer is eligible to claim, and the calendar year in which the tax credit may be used.

Due to the “estimated” nature of quarterly tax payments, premium tax credits may only be used on an annual basis against actual premium tax liabilities. Premium tax credits may first be used in January of 2006 with regard to the actual tax liability for tax year 2005.

Annual Notification of Program Due Dates The Office shall annually issue an information sheet that will indicate all applicable dates for submitting Irrevocable Offers, for making cash contributions to CoverColorado, and for submitting Applications for Tax Certificates.

APPEALS, DUE PROCESS AND RIGHT TO A HEARING

Any person adversely affected by a decision of the Office in regard to this program is entitled to a hearing pursuant to the Administrative Procedure Act 24-4-105(2), C.R.S.

MATERIAL DETERMINATION

In all cases, the Office reserves the right to determine the materiality of a requested item. _________________________________________________________________________ Editor’s Notes

History

1501 Colorado Land Use Commission

8 CCR 1501-1 RULES AND REGULATIONS (Chapters 1-4) {#sec-8-ccr-1501-1 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-1}

OFFICE OF THE GOVERNOR

Colorado Land Use Commission RULES AND REGULATIONS (CHAPTERS 1-4)

8 CCR 1501-1 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________

Chapter 1 GENERAL RULES OF PROCEDURE 1-1-100 Intent and Purpose.

The intent and purpose of the rules in this chapter shall be to provide for the conduct of the Colorado Land Use Commission, to establish procedures therefore, and to afford interested persons an opportunity to participate in Commission proceedings. 1-1-101 Authority.

These and all other regulations of the Commission are adopted pursuant to 24-65-102, C.R.S. 1973; 24- 65-103 (3), C.R.S. 1973; 24-65-104 (2), C.R.S. 1973; 24-4-103 (1), C.R.S. 1973; 24-4-107, C.R.S. 1973; 24-65-106, C.R.S. 1973; 24-65.1-101, et seq. C.R.S. 1973; 31-23-125, C.R.S. 1973. 1-1-102 Meetings.

(1) A schedule of regular meetings of the Commission shall be established for each fiscal year. The third Friday of each month is designated as the day reserved for regular meetings. At least one meeting shall be held each month.

(2) At any regular meeting of the Commission, additional meetings or changes in date of regular meetings may be adopted, by a majority of members present, provided that there is a quorum present. If such changes or additions are made, absent members shall be promptly notified by letter or telephone.

(3) Special meetings may be called by the Chairperson, or any four members of the Commission, provided that five days notice be given to Commissioners.

(4) Commission meetings shall be conducted according to the following procedure:

(a) Call to order and roll call;

(b) Approval of Minutes;

(c) Public comment (d) Chairperson's report;

(e) Director's Report;

(f) Other Matters. 1-1-103 Officers.

(1) The Commission shall elect a Chairperson and a Vice-Chairperson to serve for one fiscal year, or until successors are elected.

(2) Elections for the two offices shall take place at a regularly scheduled Commission meeting.

(3) The Chairperson and Vice-Chairperson will perform the customary duties of such offices. 1-1-104 Committees (1) The Chairperson shall appoint a nominating committee, subject to approval by the Commission, during the first stated June meeting. The Nominating Committee shall present its recommendations at the meeting during which officers are elected.

(2) An Executive Committee shall be established, consisting of Chairperson, Vice-Chairperson, and two additional members (one from the East Slope, one from the West Slope).

(3) The Executive Committee shall meet at the call of the Chair- person and shall exercise general supervision of the business of the Commission; maintain major contacts with Commission Executive Director; establish priorities and work program for the Commission (subject to ratification by the Commission); approve major agenda items; and act for the Commission between scheduled meetings.

(4) In no instance shall the Executive Committee undertake interpretative action on legislation and executive orders under which the Land Use Commission functions. 1-1-105 Special Assignments.

The Chairperson may assign, from time to time, special duties or responsibilities to individual Commission members; e.g., communications, advisory committee, fiscal matters, staffing. They shall be the Commission contact, for the Executive Director, in these designated matters. 1-1-106 Quorum and Attendance.

(1) A quorum shall be determined on one of the following bases:

(a) When Commission membership is at full strength, nine* five to return a statement to the Commission indicating their intent to remain on the list, their current address, and including payment of the $12.00 annual mailing list fee. The Director may waive the fee in appropriate cases.

(b) If Commission membership is eight or six, a quorum may be considered to be half of the membership;

(c) If Commission membership is seven, a quorum shall be four;

(d) However, a quorum of five shall be necessary for the Commission to undertake any interpretative action on legislation and executive orders under which the Land Use Commission functions.

(2) Provided that there is a quorum present at any meeting, a majority of those present may approve or reject any motion presented - except that the Rules of Procedure and other regulations adopted by the Commission may not be changed without the approval of the aforementioned quorum of five, if the Commission is at full strength, or four members if the Commission is less than full strength.

(3) Members of the Commission shall be given notice of meetings at least seven (7) days prior to the meeting, unless a meeting is specially convened under shorter notice pro- visions.

(4) No resolution, rule, regulation, or formal action of the Commission shall be valid unless made at a meeting that complies with subsections (1) and (2) of this section. 1-1-107 Citizens' Advisory Committee.

(1) A Citizens' Advisory Committee may be established by the Commission.

(2) A staff person from the Commission shall be assigned as liaison to the Citizens' Advisory Committee.

(3) Any recommendations from the Citizens' Advisory Committee must be brought to the Commission and acted upon by the Commission. 1-1-108 Open Meetings.

Pursuant to 24-6-402, C.R.S. 1973, the Commission shall conduct meetings according to the following requirements:

(1) All meetings of two or more members of the Commission at which any public business is discussed or at which any formal action is taken by the Commission, are declared to be public meetings, open to the public at all times, except as may be otherwise provided by the constitution.

(2) Any meetings at which the discussion or adoption of any proposed resolution, rule, regulation, or formal action occurs or at which a majority or quorum of the Commission is in attendance shall be held only after compliance with the notice requirements of Commission procedures. In the event no other notice provision is required by Commission procedures, notice of a Commission meeting subject to this section (2) shall be made by publication in a newspaper of general circulation in the state, and by mailing a copy of the notice to every person on the Commission's mailing list at least five days prior to the meeting.

(3) The Director of the Commission shall maintain a mailing list of persons who request notification of all meetings or of meetings at which certain specified policies will be discussed. The Director shall update the list in January of each year by requesting every person on the list to return a statement to the Commission indicating their intent to remain on the list, their current address, and including payment of the $12.00 annual mailing list fee. The Director may waive the fee in appropriate cases.

(4) No resolution, rule, regulation, or formal action of the Commission shall be valid unless made at a meeting that complies with subsections (1) and (2) of this section. 1-1-109 Minutes of Meetings.

(1) Minutes shall be written in the order of the meeting and shall be recorded promptly.

(2) Minutes shall include all matters considered and “action taken, if any, but need not be a verbatim transcript. The minutes shall reflect the number of yea and nay votes and by whom, if a division of the vote had been requested by a member of the Commission.

(3) Minutes shall state, by name, the Commissioners present, and indicate the total number of members of the public attending the meeting who signed the attendance sheet.

(4) Minutes shall be approved at the next meeting of the Commission. This action shall be reflected in that meeting's minutes.

(5) Minutes shall be signed by the Chairperson after approval by the full Commission.

(6) Minutes shall incorporate by reference, all documents acted upon, approved, adopted, etc. Such documents shall then be physically attached to the minutes.

(7) After minutes are approved by the Commission and signed, they shall be placed in a peg-type top hole binder. All documents attached to the minutes shall be included in the binder.

(8) At the end of each fiscal year, the minutes shall be permanently bound.

(9) The minutes shall be kept in a location easily accessible to members of the public and shall be open to public inspection. 1-1-110 Amendments.

The Rules of Procedure adopted by the Commission may be amended by a majority vote of the entire membership of the Commission and pursuant to the provisions of Chapter 3 of the Land Use Commission Procedures. 1-1-111 Financial Disclosure By Commission Members.

By January 30 of each year, Commission members shall disclose on the appropriate form provided by the Attorney General any interest held by the commissioner or the member's immediate family that might conflict with the member's duties on the Commission. 1-1-112 Contracting of Professional Services.

The Commission may contract for professional services for periods not to exceed 6 months. The Commission Chairperson shall act on behalf of the Commission upon the approval of the executive committee. in approving such contracts.

Chapter 2 TEMPORARY EMERGENCY POWER

ARTICLE 1 INITIATION OF PROCEEDINGS 1-2-101 Initial Contact with Commission.

(1) Temporary emergency power proceedings may be initiated if any of the following persons are contacted and provided with relevant facts by any person, including a member of the commission staff, having information relevant to a development, proposed or in progress, which may constitute a danger of injury, loss, or damage of serious and major proportions to the public health, welfare, or safety:

(a) A member of the Land Use Commission;

(b) The Director of the Land Use Commission;

(c) A member of the Land Use Commission staff;

(2) Initial contact may be made orally or in writing.

(3) If a member of the Land Use Commission is contacted and pro- vided with relevant facts about a development covered by these pro- visions, he shall notify the Director of the facts as soon as possible.

(4) If a member of the commission staff is contacted and provided with relevant facts about a development covered by these provisions, he shall immediately notify the Director of the facts.

(5) The Director shall include all such notifications in his report to the Commission at its next meeting;

(6) The commission staff may conduct any preliminary investigations and research concerning a development subject to this regulation prior to formal initiation of proceedings pursuant to this

regulation. 1-2-102 Definitions.

As used in this regulation:

(1) “Developer” means the person or persons in control of a development, and includes any entity of local, state or federal government and any special district or other governing body whatsoever.

(2) “Development” means any land development activity, proposed or in progress, including any action by any entity of local, state, or federal government and any special district or other governing body whatsoever.

(3) “Local government” means a board of county commissioners, a city council, or a board of trustees. 1-2-104 Initial Determination by Director.

(1) Upon receipt of pertinent facts about a development covered by these provisions, the director shall make an initial determination whether to pursue the matter further and shall attempt to notify the parties involved.

(2) If the director determines that the matter should not be pursued, he shall indicate his determination in writing This determination shall then be communicated to the person who initially contacted the commission. A report of such determinations, with reasons, shall be submitted to the commission at its next meeting.

(3) If the director or any member of the commission determines that the matter should be pursued further, the director shall direct one or more members of the commission staff to gather relevant facts and data about the matter. The commission staff member or members shall then notify, orally or in writing, the person who initially contacted the commission that the commission will consider the matter at a subsequent commission meeting. 1-2-104 Commission Staff Duties.

(1) The member or members of the commission staff who are assigned to the particular matter shall gather all relevant facts about the development prior to the commission meeting at which the matter will be considered.

(2) The. Commission staff may seek the assistance of all appropriate local, state, or federal offices and officials and all appropriate private parties in gathering data or in presenting data to the Commission.

(3) All departments and agencies of state and local government shall provide the Commission staff and the Commission such aid and assistance as are necessary for the performance of their duties under this regulation, as required by 24-65-103(3), C.R.S. 1973.

(4) The Commission staff shall submit to the director a written report detailing the facts about the potential or actual dangers of injury, loss, or damage to the public health, welfare, or safety posed by the development. The director shall then send a copy of the statement to the Commission Chairperson.

(5) The Commission staff shall prepare a resolution reflecting the recommendations of the written staff report. 1-2-105 Submission of Written Data Prior to Commission Meeting.

(1) The Director shall submit a copy of the written report about the development prepared by the staff and any other relevant documents, maps, photos, and other data to each member of the Commission as soon as possible prior to the Commission meeting at which the particular development will be considered.

(2) The commission staff or director shall also attempt to deliver a copy of the written staff report prepared for presentation to the commission at the initial determination hearing to the local government(s) and developer(s) concerned with the matter and any other person whom they deem to be appropriate.

ARTICLE 2 INITIAL DETERMINATION MEETING 1-2-201 Meeting for Initial Determination.

(1) The commission may consider a matter under these provisions at any regularly-scheduled or specially-convened meeting, if the Commission Chairperson or at least four members of the commission decide that a meeting should be held.

(2) Such meeting shall be open to the public. 1-2-202 Notice of Meeting.

(1) Notice of the meeting shall be made by the commission staff as soon as practicable, but in no event shall such notice be made less than three days prior to the meeting.

(2) Notice of the meeting shall be sent as soon as practicable to the governing body of the local government(s) involved, the developer(s) involved and to appropriate agencies determined by the director by first-class mail if possible, or notice may be given by oral communication followed by written confirmation if time does not permit prior written notification.

(3) Notice to the general public shall be made by publication in a newpaper of general circulation in the county where the development is occurring or proposed.

(4) Notice of the meeting shall include the following:

(a) Date, time, and location of the meeting;

(b) Name of local government involved;

(c) Name of developer and/or development involved; and (d) Brief description of the nature of the possible dangers. 1-2-204 Meeting Procedure.

(1) The Chairperson of the commission or his designee shall preside at all meetings conducted pursuant to this section, at which a quorum shall be present.

(2) The commission may hear such testimony and receive such evidence as it deems necessary to render its decision.

(3) The commission staff may supplement its written report with any additional evidence it wishes to present.

(4) The commission shall receive testimony and/or written statements and other documents in the following order:

(a) Commission staff;

(b) Local government(s) involved;

(c) Appropriate state and/or federal agencies;

(d) Developer(s) involved;

(e) Members of the public with relevant information not previously provided.

(5) The commission may continue the meeting if additional evidence is needed. 1-2-204 Commission Determination.

(1) Upon completion of the meeting, the commission may determine that the development constitutes a danger of injury, loss, or damage of serious and major proportions to. the public health, welfare, or safety.

(2) Such determination shall be based upon the evidence presented at the meeting and any other relevant evidence available to the commission.

(3) Such determination shall be made by resolution of the commission adopted by majority vote of those commissioners present.

(4) The resolution shall include the following:

(a) A statement of the pertinent facts and dangers with respect to the development;

(b) A statement notifying the governing body of the local government(s) involved of the pertinent facts and dangers with respect to the development;

(c) A description of the location of the development;

(d) A statement of the action which the commission expects the local government(s) to take; and (e) An indication of the reasonable time within which the local government(s) should remedy the situation and a time within which local government(s) must notify the commission of its proposed actions, if any, or decision not to remedy the dangers.

ARTICLE 3 NOTICE TO LOCAL GOVERNMENT(S) 1-2-401 Written Notice.

(1) Upon adoption of the appropriate resolution, the commission shall order the director to send written notice immediately to the local government(s) and developer(s) in- volved, stating the pertinent facts and dangers with respect to the development.

(2) The written notice shall consist of the resolution adopted by the commission and any other materials deemed appropriate.

(3) The notice shall be sent by certified mail. 1-2-402 Local Government Response to Written Notice.

(1) The written notice shall request the local government to immediately commence proceedings to remedy any and all dangers related to the development.

(2) If the local government commences proceedings or determines that it will commence proceedings to remedy the dangers related to the development, the local government shall notify the commission in writing, within the time limit specified by the commission for such notification, describing the action taken or to be taken.

(3) If the local government determines that it is unable or unwilling to exercise its authority in such a manner as to remedy the dangers related to the development, the local government shall notify the commission of the decision and the reasons therefor, in writing, within the time limit specified by the commission for such notification.

ACTION 4 HEARING TO REVIEW LOCAL GOVERNMENT ACTION 1-2-401 Basis for Commission Hearing.

(1) The commission may conduct a hearing to review local government action at any regularly-scheduled or specially-convened meeting, subject to the provisions of this article, for any one of the following reasons:

(a) Local government has refused to act in accordance with the commission resolution;

(b) Local government does not have the authority to act in accordance with the commission resolution;

(c) Local government has complied with the commission resolution but is unable to remedy the dangers from the development within a reasonable time;

(d) The dangers from the development are such that the local government, acting alone, will be unable to remedy the dangers within a reasonable time;

(e) The developer submits a request, with supporting evidence, for reconsideration of the resolution; or (f) Any other reasons which the commission deems appropriate.

(2) The purpose of the hearing conducted pursuant to this article is to determine whether or not to send a re- quest to the governor to review the matter and order the com- mission to issue a cease and desist order to the developer, after meeting with the commission and the local government(s) involved.

(3) The director and the commission staff shall review all requests for reconsideration of the resolution and the status of the development and local government's action pursuant to the commission resolution.

(4) The director shall make a recommendation to the commission chairman on the matter of holding a hearing pursuant to this article.

(5) The commission also may conduct hearings on petitions for declaratory orders to terminate controversies or to remove uncertainties as to the applicability to the petitioner of any statutory provision or of any rule or order of the commission. 1-2-402 Notice of Hearing.

(1) If the commission chairman or at least four members of the commission decide that a hearing should be held, written notice of the hearing shall be sent to the local government(s) and the developer(s) involved by first-class mail at least twenty (20) days prior to the hearing. Notice also shall be made by publication in a newspaper of general circulation in the county where the development is occurring or proposed.

(2) The notice shall contain the following:

(a) Time, place, and nature of the hearing;

(b) The legal authority under which the hearing is being held; and (c) The matter of law and fact which are the subject of the hearing.

(3) Any person who may be affected or aggrieved by the commission action at the hearing shall be admitted as a party to the hearing upon his submission to the commission of a written request therefor at least seven (7) days before the commission meeting, setting forth a brief and plain statement of the facts which entitle him to be admitted and the. matter which he claims should be decided.

(4) If any party is unable to attend the hearing at the time and date set, he may request the Commission to reschedule the hearing at the discretion of the Chairperson, at a time and date acceptable to the Commission and to all parties involved, but for not more than thirty (30) days after the original hearing date.

(5) Any party participating in the proceeding shall agree to submit to the commission, before or after the hearing and pursuant to written request, any and all documents, maps, and other data which the commission deems necessary to render its decision. The written notice of the hearing shall contain a statement to this effect.

(6) All documents, maps, and other data requested by the commission shall be submitted at least five working days before the hearing.

(7) The commission staff shall be given an opportunity to examine and evaluate all documents, maps, and other data requested by the commission prior to the hearing, and may submit a written evaluation of such to the commission prior to or at the hearing.

(8) Any party to the hearing may inspect, at a reason- able time, materials prepared by the commission staff for presentation at the hearing, and may obtain copies thereof for a reasonable charge from the commission.

(9) The commission staff may inspect, at a reasonable time, materials prepared by any party for presentation at the commission hearing and may obtain copies thereof for a reasonable charge.

(10) If any party or the Commission staff fails to provide the requested materials, the Commission Chairperson, upon request, may order the party of Commission staff to provide the requested material. 1-2-403 Hearing procedure.

(1) The Chairperson of the Commission or his designee shall preside over the hearing, at which a quorum shall be present.

(2) the Chairperson or his designee shall have all powers enumerated in 24-4-105(4), C.R.S. 1973.

(3) The Commission shall receive testimony and written statements or other documents, if any, having probative value, in the following order:

(a) commission staff;

(b) local government(s) involved;

(c) developer(s) involved;

(d) other parties;

(e) members of the public.

(4) Each party to the hearing also shall be given an opportunity to cross-examine witnesses as is required for a full and true disclosure of the facts, submit relevant re- buttal evidence, and object to evidentiary offers.

(5) The Chairperson or his designee may limit all or part of the evidence presented to written form if the hearing will be expedited and the interests of the parties will not be prejudiced, exclude incompetent and unduly repetitious evidence, and limit the time allowed for cross- examination if the intersts of the parties will not be prejudiced.

(6) Any party to the hearing may represent himself or be represented by legal counsel. Any party may present the relevant testimony of experts.

(7) The burden of proof shall be on the party re- questing the commission action and shall be by a preponderance of the evidence.

(8) The hearing shall be recorded by either a reporter or electronic recording device. When requested by a party to the hearing or by a member of the commission, a transcript of the hearing or a part thereof shall be prepared. The party, other than a member of the commission, requesting the transcript shall pay all costs thereof and shall provide one copy of the transcript to the commission and one copy to the commission staff. Any hearing transcript on file at the commission office shall be made available to any interested person at reasonable times for inspection and study, and a copy may be obtained for a reasonable charge.

(9) A record of the hearing shall be kept and shall contain the following:

(a) Hearing transcript, if any;

(b) All documents, maps, and other data presented to the commission, either prior to, during, or after the hearing. 1-2-404 Commission Determination.

(1) The commission shall issue a written order in the form of a resolution at the end of the hearing or after due deliberation within a reasonable time thereafter. The commission's deliberation and decision shall be made at a meeting open to the public.

(2) The commission order shall contain the following:

(a) A statement of findings and conclusions upon all the material issues of fact, law, or discretion presented by the record;

(b) The determination, based upon the record, that the development does or does not constitute a danger of injury, loss, or damage of serious and major proportions to the public health, welfare, or safety;

(c) A determination that the local government(s) involved has or has not had a reasonable time within which to remedy the danger and has either failed to do so or is unable to do so;

(d) A determination of whether or not to request the governor to review the matter;

(e) Incorporation by reference of any earlier commission resolution(s) pertaining to the same matter; and (f) Such other findings and conclusions as the commission may deem appropriate.

(3) A copy of the order shall be sent by certified mail to each party to the hearing. A copy shall also be maintained at the commission office and shall be made available to any person requesting a copy of the resolution at a reason- able charge.

(4) The order shall be effective upon the date mailed to the parties or such later date as is stated in the order.

(5) If the order contains a determination to request the governor to review the matter, a copy of the order shall be personally delivered to the governor immediately after preparation of the order.

ARTICLE 5 REQUEST TO THE GOVERNOR 1-2-501 Contents of Request.

(1) The request to the governor shall include all re- solutions adopted by the commission pertaining to the matter and the record for any hearings conducted on the matter.

(2) The request may also contain written summaries of the development and the dangers created by it, written summaries of the data presented to the commission, and any additional recommendations from the commission staff.

(3) The request shall contain a cover letter asking the governor to review the facts and dangers with respect to the development, to meet with the local government(s) involved and the commission at the earliest possible time, and to direct the commission to issue a cease and desist order to the developer.

ARTICLE 6 CEASE AND DESIST ORDER 1-2-601 Direction from Governor.

(1) If the governor determines that the development constitutes a danger of injury, loss, or damage of serious and major proportions to the public health, welfare, or safety and directs the commission to issue a cease and desist order, the commission shall issue such order immediately.

(2) Upon receipt of such direction from the governor, the Commission Chairperson or his designee shall direct the director to prepare a written cease and desist order. 1-2-602 Contents of Cease and Desist order.

(1) The written cease and desist order shall contain the following information:

(a) The name of the developer(s);

(b) An exact description of the location and nature of the development covered by the order;

(c) A statement that the governor has directed the commission to issue the order;

(d) A statement that the person named in the order discontinue the land development activity which constitutes a danger of injury, loss, or damage of serious and major proportions to the public health, welfare, or safety immediately upon receipt of the written cease and desist order;

(e) A statement that the commission will petition the district court for the county in which the development is located for a temporary restraining order, preliminary injunction, or permanent injunction if the land development activity is continued after receipt of the cease and desist order; and (f) A statement that the commission staff is establishing planning criteria necessary to eliminate or avoid the land development activity which constitutes a danger of injury loss, or damage of serious and major proportions to the public health, welfare, or safety and that the planning criteria will be sent to the appropriate local government agency immediately upon completion.

(2) The cease and desist order shall be signed by the chairperson of the Commission or his designee, which may include the director.

(3) The cease and desist order shall be effective on the date received by the developer(s) or such later date as may be indicated in the order. 1-2-603 Service.

(1) The cease and desist order shall be sent by certified mail to the last known address(es) of the developer(s).

(2) A copy of the order shall be sent to the local government(s) involved, other parties and the governor.

(3) A copy of the order also shall be kept on file at the commission office and shall be made available for inspection and study by any person. A copy of the order may be obtained from the commission for a reasonable charge. 1-2-604 Order to Local Government to Implement Planning Criteria.

(1) Immediately upon issuance of a cease and desist order, the commission staff shall prepare a statement of the planning criteria necessary to eliminate or avoid the land development activity which constitutes a danger of injury, loss, or damage of serious and major proportions to the public health, welfare, or safety.

(2) The commission staff shall present the planning criteria statement to the commission at the next regularly scheduled commission meeting. However, if such meeting is to be held within ten days after the effective date of the cease and desist order, the commission staff may present the planning criteria statement at the commission meeting following the next regularly scheduled meeting.

(3) Upon approval and adoption by the commission, the planning criteria statement shall be sent to local government (s) involved with an order to the appropriate local government agency or agencies.

(4) The order shall specify the agency or agencies subject to the order and shall direct the specified local government agency or agencies to take immediate action to implement the planning criteria through adoption of an appropriate regulation to control or prevent the dangers caused by the development.

(5) If the appropriate local governmental agency or agencies do not take immediate steps to implement the order, the commission may apply to the district court for the county in which the development is located for a temporary restraining order, preliminary injunction, or permanent injunction, ordering the local governmental agency or agencies to take immediate action to implement the planning criteria.

PART 1 COLORADO LAND USE COMMISSION PROCEDURES

Chapter. 3 PROCEDURE FOR ADOPTING RULES

ARTICLE 1 Introduction 1-4-101 Purposes.

These regulations are adopted in order to ensure that all rules, regulations, model regulations, and guidelines adopted by. the Commission comply with applicable state laws and to afford all members of the public appropriate and adequate opportunity to participate in the procedure for adoption of such rules. 1-4-102 Authority.

These rules are adopted pursuant to the authority stated in Article 1-1-101 of the Commission's General Rules of Procedure. 1-4-103 Definition.

As used in this regulation, the term “rule” includes rules and regulations or amendments thereto, but does not include Rules of Agency Organization, interpretative rules or general statements of policy. 1-4-104 Temporary or Emergency Rule-Making.

(1) The Commission may adopt a rule on a temporary or emergency basis without complying with the notice and hearing requirements of these rules, if the Commission finds that immediate adoption of the rule is imperatively necessary for the preservation of public health, safety, or welfare and that compliance with those procedures contained herein and in 24-4-103, C.R.S. 1973, would be contrary to the public interest.

(2) Such temporary or emergency rules may have effect for up to three months, unless they are adopted on a permanent basis pursuant to the procedures set out in this chapter. 1-4-105 Open Meetings.

All hearings and other meetings held pursuant to these rules shall be conducted in accordance with the open meetings requirements of Section 1-1-108 of Commission procedures and any other requirements of state law.

ARTICLE 2 CONTEMPLATED RULE MAKING 1-4-201 Informal Meetings and Workshops.

When the Commission or the Commission's staff determines to begin consideration of adopting a rule, but before a proposed rule has been promulgated, the Commission or the Commission's staff may hold one or more informal meetings or workshops in order to afford interested persons an opportunity to submit views or otherwise participate informally on the proposals under consideration. 1-4-202 Notice.

(1) All persons on the Commission's mailing list shall be notified of such informal meeting or workshop at least seven working days prior to the initial meeting or workshop. Thereafter, notice of continuations of the meeting or of subsequent meetings or workshops on the same issue need not be sent to all persons on the mailing list.

(2) The notice of the informal meeting or workshop shall state the time, date, place, and subject matter of the meeting, and may include a copy of the proposals under consideration.

ARTICLE 3 RULE-MAKING PROCEDURE 1-4-301 Hearing Required.

After the Commission or Commission staff has formulated a proposed rule, the Commission shall set the matter for a public hearing before the full Commission. 1-4-302 Notice of Rule-Making.

(1) Notice of the proposed rule-making hearing shall be published at least twenty days prior to the hearing by mailing a copy of the notice to each person on the Commission's mailing list, the Attorney General and other relevant state and federal agencies.

(2) A copy of the proposed rule and the notice of rule- making shall be kept on file in the Commission's office for inspection by any person during regular office hours and may be copied for a reasonable fee.

(3) Notice of the proposed rule-making hearing shall be published in a newspaper of general circulation in the state at least twenty (20) days prior to the hearing. 1-4-303 Contents of Notice.

The notice shall specify the time, place, date, and nature of the rule-making proceedings, the authority under which the rule is proposed, and either a summary or a full copy of the proposed rule. 1-4-304 Procedure.

(1) The rule-making hearing shall be conducted according to the Commission's General Rules of Procedure.

(2) Notwithstanding any other provisions of these regulations, the hearing shall afford all interested persons an opportunity to submit written data, views, or arguments. All interested persons shall also be given an opportunity to present such data, views, or arguments orally unless the Commission finds this to be un- necessary.

(3) A rule-making hearing may be continued for as long as the Commission deems necessary. However, a proposed rule must be finally acted upon within 180 days of the original notice of proposed rulemaking.

(4) The hearing shall be recorded by an electronic recording device or stenographer. Any person may obtain a transcription of the hearing by paying the cost thereof and by providing a copy of any transcript to the Commission. 1-4-305 Petition for Issuance, Amendment, or Repeal of the Rule.

(1) Any interested person shall have the right to petition for the issuance, amendment, or repeal of a rule.

(2) Such petition shall be kept on file at the Commission offices and shall be open for inspection by any person during regular office hours.

(3) The Commission may hear the petition at its discretion, except that when the Commission schedules a hearing on a proposed rule related to any petition, such petition shall be considered and acted upon in the same proceeding. 1-4-307 Lobbyist Registration and Disclosure.

(1) All persons participating in either an informal meeting on contemplated rule-making or in a hearing on a proposed rule who are paid for their participation or who are reimbursed for their expenses shall file the appropriate registration and/or disclosure forms as a lobbyist with the office of the secretary of state, either before or immediately after the meeting or hearing. The provisions of this subsection (1) shall not apply to any state official acting in his official capacity or any elected public official acting in his official capacity.

(2) The Commission shall provide the appropriate registration and disclosure forms to persons who must file with the secretary of state.

(3) At each Commission meeting and informal meeting or work- shop, an attendance list shall be compiled, indicating the persons in attendance and whom they represent. The attendance list shall be kept on file by the Commission and copies made available to persons for a reasonable charge.

ARTICLE 4 ADOPTION OF RULE 1-4-401 Commission Determination.

(1) The Commission shall consider all evidence submitted at the rule-making hearing and may consider any other evidence available to the Commission in making its determination.

(2) The Commission may adopt, adopt with modification, or reject the proposed rule by a majority vote of the Commission members present at the hearing. 1-4-402 Notice of Adopted Rule.

(1) Upon adoption or adoption with modification of a rule, the Commission shall submit the rule to the Attorney General for his opinion on its constitutionality and legality.

(2) Upon receipt of an Attorney General opinion approving a rule, the Commission shall publish the rule as finally adopted by mailing a copy of the rule to all persons on the Commission's mailing list and relevant state and federal agencies.

(3) Two copies of each rule as finally adopted and the Attorney General opinion for each Yule shall be submitted to the office of the secretary of state according to the form, if any, prescribed by the secretary of state. 1-4-403 Effective Date.

A rule shall be effective twenty days after it is published as finally adopted and approved. 1-4-404 Register of Commission Rules.

(1) The Commission shall maintain a register of all rules as finally adopted, including a copy of the Attorney General opinion for each rule.

(2) Any person may inspect the register of Commission rules during office hours and may receive a copy of any part thereof for a reasonable charge.

Chapter 4 PROCEDURES FOR INITIATION AND REVIEW OF LOCAL GOVERNMENT ACTION UNDER H.B. 1041 (1974)

ARTICLE 1 1-4-101 Intent and Purpose.

The intent and purpose of these regulations shall be to:

(1) Provide for the conduct of the Land Use Commission;

(2) Facilitate administration of matters of state interest consistent with 24-65.1-202 and 204, C.R.S. 1973;

(3) Assure compliance by local governments with the standards and provisions set forth in 24- 65.1-101 et seq., C.R.S. 1973;

(4) Fulfill the Commission's responsibility to initiate and review designation and regulation of matters of state interest by local governments under 24-65.1-406 and 407, C.R.S. 1973; and (5) Establish a procedure for the Commission to exercise its duties under 24-65.1-405, 406, 407, C.R.S. 1973. 1-4-102-Applicability These regulations shall apply to:

(1) All local government orders, adopted pursuant to 24.65.1-101, et seq., C.R.S. 1973, designating matters of state interest and enacting guidelines and regulations for the administration thereof (hereinafter referred to in this chapter as “orders” or “an order”);

(2) All Commission recommendations and requests to local governments to modify an order and/or to take action in regard to a specific matter of state interest; and (3) All other Commission actions taken to ensure the proper administration of matters of state interest. 1-4-104 Authority.

These procedures are authorized by §24-65-103(3) and §§24-65.1-405(2), 406, and 407, C.R.S. 1973. 1-4-104 Temporary Suspension of Development and/or Conduct of an activity.

(1) After a matter of state interest is designated by a local government pursuant to §24-65.1-404, C.R.S. 1973, no person shall engage in development in the designated area of state interest and no person shall conduct the designated activity of state interest until:

(a) The original or the modified order for such area is reviewed and accepted by the Commission pursuant to these regulations or;

(b) The Commission, acting in its discretion under 1-4- 506 of these procedures, declines to seek judicial review of a local government refusal to take action in conformance with a formal Commission request; or (c) A court of competent jurisdiction has finally determined the matter; or (d) The local government has rejected a Commission recommendation and the Commission has decided not to formally request the local government to take action with regard to a matter of state interest pursuant to 24-65.1-407, C.R.S. 1973.

(2) After a local government has received a formal Commission request to designate a matter of state interest pursuant to 24-65.1-407, C.R.S. 1973, no person shall engage in development in the area for which designation has been requested, nor conduct an activity within the local government's jurisdiction for which designation has been requested until:

(a) The local government has conformed with the Commission request and the resulting order has been reviewed and accepted by the Commission; or (b) Local government has not acted upon the request or has refused to follow the request and the Commission, proceeding under §1-4-206 of these regulations, has found that there was good cause for the failure to act and has declined to seek judicial review of the local government refusal to designate the matter of state interest; or (c) A court of competent jurisdiction has finally determined the matter or has authorized the development or activity to proceed under terms and conditions established by the court.

ARTICLE II REQUESTS FOR LOCAL GOVERNMENT DESIGNATIONS 1-4-201 Staff Study of Potential Matters of State Interest.

(1) Any member of the Commission or its Director, acting on his own initiative or in response to information submitted by any person, may at any time request the Commission staff to conduct a study of any area or activity within the state which could be a matter of state interest. In determining whether to request a staff study, the Commission or its director shall consider the number of people presenting the request and whether local officials have been given the opportunity to address the matter pursuant to C.R.S. 1973, 24-65.1-101, et seq.

(2) In the course of such a study the staff shall consider:

(a) The exact nature of the area or activity in question.; and (b) Actions which local governments have taken with respect to the area or activity; and (c) Information concerning the area or activity from appropriate local, state and federal agencies, and private parties; and (d) Relationship of the area or activity to any applicable land use plans; and (e) Reasons why the particular area or activity is of state interest, the dangers that would result from uncontrolled development of any such area or uncontrolled conduct of such activity, and the advantages of development of such area or conduct of such activity in a coordinated manner.

(3) Upon completion of such study, the staff shall present a written report to the Commission of the results of its study.

(4) The report shall include:

(a) A specific description of the activity in question or of the boundaries of the area in question; and (b) A listing of local governments having jurisdiction over, and actions taken in regard to, the area or activity in question; and (c) Findings of the staff with regard to §1-4-201(2)(e) of these regulations; and (d) Recommendations for Commission action.

(5) The Commission staff shall prepare resolutions reflecting the alternative courses of action contained in the staff study. 1-4-202 Commission Consideration.

(1) Upon receipt of a staff report, the Commission shall consider the report and recommendations therein at the next regularly scheduled Commission meeting or at a meeting specially convened by the Commission. Consideration of the staff report may be scheduled for a future Commission meeting prior to submittal of the report to the commission. The staff report shall be mailed to the Commission, the developer(s) involved if the request is with respect to a specific development, and the appropriate local government(s) at least (5) days prior to the designation request meeting.

(a) Notice of the meeting shall be made by the Commission staff as soon as practicable, but in no event shall such notice be made less than five (5) days prior to the meeting.

(b) Notice of the meeting shall be sent as soon as practicable to the governing body of the local government(s) involved, to the developer(s) involved if the request being considered' in regard to a specific development, and to the appropriate agencies determined by the director by first- class mail, if possible, or notice may be giver by oral communication followed by written confirmation, if time does not permit prior written notification.

(c) Notice to the general public shall be made by publication in a newspaper of general circulation in the state. The Commission staff may also send notice to local newspapers in the area affected by the contemplated designation request.

(d) Notice of the meeting shall include:

I. The date, time, and location of the meeting;

II. Name of the local government(s) involved;

III. Name of the developer and/or development involved if the request is being considered with respect to a particular development; and IV. A brief general description of the subject matter to be considered.

(2) After consideration of the staff study and of any recommendations, comments or materials from local governments involved and from any interested person, the Commission shall, by majority vote of those members present, take formal action with respect to the matter in question, which action may include:

(a) A determination that the Commission does not consider the matter in question to be of sufficient state interest to require immediate action by the Commission. Such a determination shall not preclude a local government from proceeding to designate such a matter pursuant to §24-65.1-404, C.R.S. 1973; or (b) A postponement of further Commission action after notification of pending prompt local government action on the matter in question; or (c) A formal request to a local government to take action with respect to a specific area or activity as a matter of state concern; or (d) A decision to exercise Temporary Emergency Powers to deal with the situation.

(3) The Commission may take action pursuant to 2(c) and (d) of this section concurrently. 1-4-204 Request to Local Governments.

(1) In the event that the Commission requests a local government to take action with respect to a matter of state interest, the Commission shall direct the Director to immediately transmit the Commission's formal request to the local government involved.

(2) The formal request shall include the following:

(a) A copy of the staff study considered by the Commission; and (b) A list of all materials considered by the Commission in reaching its decision; and (c) Any findings made by the Commission; and (d) An identification of the specific matter considered by the Commission to be a matter of state interest, either specifying the boundaries of the area to be designated or describing specifically the activity to be designated; and (e) Reasons why the particular matter is of state interest; and (f) The dangers that would result from uncontrolled development of any such area or uncontrolled conduct of such activity; and (g) The advantages of development of such area or conduct of such activity in a coordinated manner. 1-4-204 Local Government Action.

(1) Within 30 days of receipt of a formal Commission request to take action with respect to a matter of state interest, the local government shall publish notice and within 60 days shall hold a public designation hearing pursuant to §24-65.1-404, C.R.S. 1973.

(2) Upon completion of the public designation hearing it shall be the duty of the local government to issue an order either adopting, adopting with modification, or rejecting the matters encompassed by the formal request. 1-4-205 Commission Review.

Local government orders of designation and regulations, or orders rejecting designation, adopted pursuant to the Commission's formal request shall be reviewed under the procedures established by Articles III, IV and V of this chapter. 1-4-206 Judicial Review.

In the event that the local government fails to designate or adopt regulations in response to a Commission formal request, or the local government order does not conform to statutory requirements, the Commission shall at the next regularly-scheduled meeting following the local government's action, consider the validity of the action. Unless the Commission finds that there was good cause for the local government's failure to designate or adopt regulations pursuant to the Commission request, the Commission shall seek judicial review of the local government action by a trial de novo in the district court for the judicial district in which the local government is located. 1-4-207 Temporary Emergency Powers.

If the Commission takes action pursuant to sections 202 (2) (d) or or 202(3) above, the matter also shall be considered according to provisions of Chapter 2 of the Land Use Commission Procedures, governing temporary emergency power proceedings.

ARTICLE III REVIEW OF LOCAL GOVERNMENT ORDERS 1-4-401 Local Governments to Forward Relevant Materials.

(1) Within thirty (30) days of a local government adoption of an order, said local government shall forward to the Land Use Commission all relevant materials relating to the designation, guidelines, and regulations, or to the refusal to designate.

(2) As used in this chapter “relevant materials” shall include each and all of the following:

(a) The records of any public hearings on designation and guidelines and regulations, including the following:

(i) Notice of the hearing; and (ii) Certificate of publication of the notice; and (iii) Names and addresses of persons who presented oral or written statements of evidence; and (iv) A copy of all written evidence considered; and (v) A transcript of the proceeding if one was made.

(b) Written findings of the governing body concerning the matters considered which shall include the governing body's reasons for designation or rejection of designation.

(3) In the event that the hearing results in adoption of an order of designation, “relevant materials” shall also include the following:

(a) the order of designation and any maps pertaining thereto;

(b) The complete text of guidelines and regulations adopted for administration of the designated matter, and the order adopting said guidelines and regulations;

(c) Any explanatory material which the local government feels would aid Land Use Commission review; and (d) In the event that the regulations adopted are not in the same format as that used in Model Regulations promulgated by the Land Use Commission, an explanation of the manner in which the regulations will be incorporated into and/or administered and enforced under existing local government ordinances or regulations.

(4) Forwarding of a local government order and relevant materials shall be deemed to be completed when all materials have been transmitted to the Commission staff. Completion of forwarding shall be determined by the Director. 1-4-402 Official Commission Receipt.

(1) If completion of forwarding of a local government order and relevant materials occurs after a regularly scheduled Commission meeting and before the next regular mid-session Executive Committee meeting, the order shall be officially received at the first mid- session meeting of the Executive Committee after completion of for- warding. An order so received shall be considered for formal action at the next regularly scheduled monthly Commission meeting.

(2) If completion of forwarding of a local government order and relevant materials occurs after a midsession Executive Committee meeting and before a regularly scheduled Commission meeting, the order shall be officially received at the first regularly scheduled Commission meeting after completion of forwarding An order so received may be considered for formal action at a special Commission meeting convened for that purpose. action at a special Commission meeting convened for that purpose.

(3) If completion of forwarding of a local government order and relevant materials occurs after a regularly scheduled commission meeting and a mid-season executive committee meeting does not occur, the Commission Chairperson may, at his or her discretion, officially receive the order. An order so received shall be considered for formal action at the next regularly scheduled monthly Commission meeting. 1-4-403 Referral tor Review.

(1) Upon official receipt of a local government order and relevant materials, said order and materials shall be referred to the Director who shall implement a staff review of the order and materials.

(2) Upon official receipt the Director shall be directed to send official notice to the local government submitting the order and materials. Such notice shall inform the local government that their order and materials have been officially received, that they are being referred for staff review, and that they will be considered for formal action at the next regularly scheduled meeting of the Commission, or at a specially convened meeting. Such notice shall indicate the time, place and date of the meeting at which the local government order shall be considered.

(3) The published agenda for the next meeting following official receipt shall indicate local government orders which will be considered for formal action at that meeting. 1-4-404 Review.

(1) The Land Use Commission staff shall make a prompt review of every local government order.

(2) In its review the staff shall consider and make written comments about the following:

(a) Compliance with procedural requirements in the adoption of the order;

(b) Comparison of the order with Model Regulations promulgated by the Land Use Commission;

(c) Compliance of the order with the relevant provisions of Part 2 of 24-65.1-101 et seq., C.R.S. 1973; and (d) Adequacy of the order in protecting against loss or damage of serious and major proportions to the public, health, welfare, or safety that might result from development proposed or in progress. 1-4-405 Recommendation of Staff (1) Upon completion of the review, the Staff shall prepare a written recommendation for the Land Use Commission.

(2) Said recommendation shall incorporate the comments of the staff and shall recommend that the Land Use Commission:

(a) Accept the order of designation and the guidelines and regulations for administration; or (b) Recommend specific modification thereof to the local government; or (c) Formally request the local government to modify the order or take other action with regard to the matter; or (d) Recommend other changes in the order which are deemed to be appropriate in a technical sense, but which are not considered necessary to the validity of the order; or (e) Proceed under the provisions of §1-2-101, et seq., of the Commission's Procedures, Temporary Emergency Power.

(3) Staff review and recommendations shall be completed within fourteen days of referral and shall be forwarded to each member of the Commission and to the local government which had submitted the order.

ARTICLE IV ACCEPTANCE OR REQUEST FOR MODIFICATION 1-4-401 Land Use Commission to Take Formal Action.

(1) At the first regularly scheduled monthly meeting or specially convened meeting of the Land Use Commission following official receipt of a local government order and relevant materials, the Land Use Commission shall take formal action with respect to said order.

(2) In reaching a decision on the formal action to be taken, the Commission shall consider recommendations and comments from the Commission Director, from representatives of the local government involved, and from any interested persons. 1-4-402 Acceptance, Recommendation for Modification, or Formal Request to Take Action.

(1) By a majority vote of the Commission members present, provided that a quorum of the Commission is present, the Commission shall:

(a) Officially accept the order adopted by the local government changes thereto; or (b) Officially accept the order adopted and recommend technical changes thereto; or (c) Recommend to the local government pursuant to §24-65.1-406, C.R.S. 1973, that the order be modified to conform with such recommendations as the Commission deems necessary for compliance with Part 2 of Article 65.1 of Title 24, C.R.S. 1973; or (d) Formally request the local government, pursuant to §24-65.1-407, C.R.S. 1973, to adopt a new order or take other action that conforms with such recommendations as the Commission deems necessary for compliance with the standards of Article 65.1, title 24, C.R.S. 1973; or (e) Invoke the Commission's Temporary Emergency Power procedure as it relates to a matter of state interest within the jurisdiction of the local government involved, in which case the commission shall proceed under the provisions of Chapter 2 of the Land Use Commission Procedures and the Commission resolution Issued pursuant to this section shall be deemed to satisfy the requirements of Articles 2 and 3 of Chapter 2 of the Land Use commission Procedures; or (f) Request the local government to act pursuant to both (d) and (e) above.

(g) Take other action which the Commission deems appropriate.

(2) Immediately after a vote on formal action, the Land Use Commission shall issue an official resolution reflecting the action taken.

(3) Such resolution shall direct the Director or the staff to prepare a written notice of the action taken for transmittal to the local government, and shall indicate any findings made by the Commission and any recommendations which are to be included in the written notice. 1-4-404 Local Government to be Notified of Acceptance.

(1) In the event that the Commission officially accepts the order of designation submitted by the local government, the Director shall send notice of acceptance to the local government within seven days of such official acceptance.

(2) Such notice shall include a copy of the official resolution of acceptance. Any recommendations for technical changes in the local government order, and any other material which the Commission or Director may deem relevant. 1-4-404 Resolution Recommending Modification.

(1) In the event that the Commission recommends modification of a local government order, pursuant to §24-65.1-406, C.R.S. 1973, notice of such recommendation shall be sent to the local government within seven days after the Commission has recommended modification.

(2) Such notice shall include the following:

(a) A copy of the resolution recommending modification which contains the specific recommendations being made;

(b) A written summary of materials or evidence considered by the Commission in arriving at its decision;

(c) Any other materials which the Commission may deem relevant. 1-4-405 Formal Request to Take Action.

(1) In the event that the Commission, pursuant to 1-4-402 (1)(d) or (f), above, formally requests the local government to adopt a new order or take other action deemed necessary for compliance with the provisions of 24-65.1-101, et seq., C.R.S. 1973, notice of such request shall promptly be sent to the local government.

(2) Such notice shall include the following:

(a) A copy of the resolution requesting action which contains the specific recommendations being made;

(b) A written summary of materials or evidence considered by the Commission in arriving at its decision;

(c) Written findings as to why the particular area or activity is of state interest, the dangers that would result from uncontrolled development of any such area or uncontrolled conduct of such activity, and the advantages of development of such area or conduct of such activity in a coordinated manner; and (d) Any other materials which the Commission may deem relevant. 1-4-406 Court Review of Local Government Action.

If the Commission, pursuant to section 1-4-402(1) (g), deems it appropriate to have a court review the local government's action under C.R.S. 1973, 24-65.1-407, the Commission shall proceed according to

section 1-4-506 of this regulation.

ARTICLE V PROCEDURE AFTER COMMISSION REVIEW 1-4-501 Acceptance.

After the local government has received notice of Commission acceptance of its order, the designation and regulation shall be considered to be finally determined and the local government may consider applications for permits under its regulations. 1-4-502 Recommendation for Modifications.

(1) If the Commission recommends that the local government modify its order, the local government shall, within 30 days of receipt of such request:

(a) Modify its original order in a manner consistent with the recommendations of the Commission and re-submit the modified order to the Commission for review; or (b) Notify the Commission that the Commission's recommendation for modification is rejected.

(2) A modified order re-submitted to the Commission for review or a notice of rejection of a Commission recommendation must be accompanied by written findings by the local government in support of either action taken.

(3) In the event that action is taken by the local government under this section, the order in question shall not be considered to be finally determined and no applications for permits under said regulations may be considered and no person shall either engage in development or conduct a designated activity until such matter is finally determined pursuant to these regulations.

(4) The requirements of this section shall not apply to local government consideration of technical changes, recommended as a form of technical assistance, but not considered by the Commission to be necessary for compliance with statutory requirements. 1-4-504 Re-submitted Orders.

In the event that an order is modified by local government in response to Commission recommendation and is re-submitted to the Commission for review, such re-submitted material shall be handled by the Commission in the same manner as provided in these regulations for an original order. 1-4-504 Re-submitted Orders.

(1) In the event that an order is modified by local government in response to Commission recommendation and is re-submitted to the Commission for review, such re-submitted material shall be handled by the Commission in the same manner as provided in these regulations for an original order.

(2) If, after consideration of materials and evidence presented during initial Commission review of the order in question and of written findings submitted by the local government in support of its action, the Commission determines that changes in the local government order are necessary for compliance with 24-65.1-101, et seq., C.R.S. 1973, the Commission shall, pursuant to 24-65.1- 407, C.R.S. 1973, formally request the local government to adopt an order or take other action that conforms with such recommendations as the Commission deems necessary for compliance.

(3) Notice of such formal request shall be transmitted to the local government in accordance with §1-4- 405 of these regulations (4) If the Commission determines not to formally request the local government to take action, the local government order shall be considered to be accepted and the provisions of §1-4-501 of these regulations shall apply.

(5) In the. event that the Commission has formally requested a local government to designate one or more matters of state interest, the local government has held a designation hearing and issued an order there- under, and the local government has failed to modify the order pursuant to a Commission recommendation, the Commission may seek judicial review of the matter pursuant to 1-4-406 and 1-4-506 of these rules. 1-4-505 Commission Formal Requests.

In the event that the Commission formally requests the local government to adopt a new order or take other action which the Commission deems necessary for compliance with the requirements of 24-65.1- 101, et seq., C.R.S. 1973, the local government shall take action as provided by §§1-4-204 and 301 of these regulations. 1-4-506 Judicial Review.

(1) If the Commission issues a formal request to a local government to take action and the local government fails to adopt an order or take other action that conforms with standards which the Commission deems necessary for with 24-65.1-101, et seq., C.R.S. 1973, the Commission may seek judicial review of the local government's action or failure to act in a trial de novo in the district court for the judicial district in which the local government is located.

(2) After the Commission has formally requested a local government to take action with regard to a specific matter which the Commission considers to be of state interest within the local government's jurisdiction, and before the matter has been finally determined, the Commission may seek a temporary restraining order, preliminary injunction, or permanent injunction in the district court for the judicial district in which the local government is located. The Commission may seek such relief in order to:

(a) Prevent any development by any person in an area subject to the Commission request;

(b) Prevent the local government from developing or attempting to permit development in an area or conduct of an activity subject to the Commission request; or, (c) Prevent any person from conducting an activity which is subject to the Commission request. _________________________________________________________________________ Editor’s Notes

History

1501 Governor's Office of Information Technology

8 CCR 1501-4 Information and Technology Management Code {#sec-8-ccr-1501-4 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-4}

OFFICE OF THE GOVERNOR

Governor’s Office of Information Technology INFORMATION AND TECHNOLOGY MANAGEMENT CODE - Repealed eff. 04/14/2014 8 CCR 1501-4 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 8 CCR 1501-4 is repealed entirely. _________________________________________________________________________ Editor’s Notes

History Entire rule repealed eff. 04/14/2014.

8 CCR 1501-5 Rules in Support of the Colorado Information Security Act {#sec-8-ccr-1501-5 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-5}

Office of the Governor RULES IN SUPPORT OF THE COLORADO INFORMATION SECURITY ACT 8 CCR 1501-5 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] 5.1 Authority The Chief Information Security Officer in the Office of Information Technology (OIT) is authorized and directed by the provisions of sections 24-37.5-403(2)(b), C.R.S., 24- 37.5-403(2)(i), C.R.S., 24-37.5-404(1), C.R.S., 24-37.5-404.5(3)(a), C.R.S. and the Information Security Act, Title 24, Article 37.5, Part 4, C.R.S. to promulgate rules to ensure the development and maintenance of minimum information security controls to protect communication and information resources that support the operations and assets of public agencies.

The rules are intended to be consistent with the requirements of the State Administrative Procedures Act, section 24-4-101 et seq., C.R.S. (the “APA”). 5.2 Scope and Purpose A. The primary goal of these rules is to provide for the safety and security of communication and information resources within the State.

B. These rules govern the development and maintenance of minimum information security controls to protect public agency assets against unauthorized access, disclosure, use, and modification or destruction, whether accidental or deliberate, as well as to assure the confidentiality, integrity, and availability of information. 5.3 Applicability A. These rules apply to all public agencies as defined in C.R.S. section 24-37.5- 102(26), that manage and administer IT systems intended to store, process, or transmit data.

B. These rules do not apply to state-supported institutions of higher education or the general assembly in accordance with C.R.S. section 24-37.5-102(26). 5.4 Definitions Agency Cybersecurity Plan (ACSP): An information security plan created and implemented by the information security personnel assigned to non-consolidated agencies on an annual basis that describes the Agency’s current security posture, includes an assessment of current risk, covers the incident response capabilities, disaster recovery capabilities, and a plan of action and milestones that describe current gaps in the security program and summarizes the goals of the Agency to address those gaps over the coming fiscal year.

Agency Designated Information Security Officer: A role delegated to a knowledgeable individual, responsible for supporting the Agency Cybersecurity Plan.

Chief Information Security Officer (CISO): Unless otherwise referenced, CISO refers to the CISO as established by C.R.S. § 24-37.5-403.

Enterprise Cybersecurity Plan (ECSP): An annual information security plan created by the Office of Information Security within OIT for State Agencies. The ECSP includes an assessment of current risk, covers incident response and disaster recovery capabilities, and includes a plan of action and milestones that describe current gaps in the security program and summarize the goals of OIT to address those gaps over the coming fiscal year.

Incident: An unplanned interruption to or quality reduction of an IT service.

Non-Consolidated Agency or Agencies: Those public agencies whose information technology functions were not consolidated within the Governor’s Office of Information Technology and are not defined as a state agency under C.R.S. § 24-37.5-102(28).

Plan of Action and Milestones (POA&M): Agency remediation plans to close compliance gaps and mitigate known risks.

Public Agency: Has the same meaning as defined in C.R.S. § 24-37.5-102(26), which means every state office, whether executive or judicial, and all of its respective offices, departments, divisions, commissions, boards, bureaus, and institutions. “Public Agency” does not include institutions of higher education or the general assembly.

Risk: The possibility of harm or loss to any software, information, hardware, administrative, physical, communications or personnel resource.

Security Incident: Has the same meaning as defined in C.R.S. § 24-37.5-102(27), which means an accidental or deliberate event that results in or constitutes an imminent threat of the unauthorized access, loss, disclosure, modification, disruption, or destruction of communication and information resources.

State Agency: Has the same meaning as defined in C.R.S. § 24-37.5-102(28), which means all of the departments, divisions, commissions, boards, bureaus, and institutions in the executive branch of the state government. “State Agency” does not include the legislative or judicial department, the department of education, the department of law, the department of state, the department of the treasury, or state-supported institutions of higher education. Colorado SB 08-155 consolidated the IT functions of State Agencies under OIT.

State Chief Information Officer (CIO): Has the same meaning as defined in C.R.S. § 24-37.5-102(3), which means the chief information officer appointed pursuant to § 24- 37.5-103, C.R.S. 5.5 Information Security Planning A. Information security planning is essential to prevent unauthorized access, disclosure, duplication, modification, diversion, destruction, loss, misuse or theft of electronic and non-electronic information assets.

B. Each public agency in the State of Colorado shall maintain and implement an ACSP or ECSP to control risks associated with access, use, storage and sharing of citizen and State electronic and non-electronic information.

1. Duties of Non-Consolidated Agencies:

a. Designate an individual with agency IT knowledge as an Agency Designated Information Security Officer. The individual should exhibit a background and expertise in security and risk management for communications and information resources.

b. The Agency Designated Information Security Officer and appropriate support staff shall develop, maintain, and implement an ACSP.

2. State agencies under C.R.S. § 24-37.5-102(28) are included in the ECSP managed by OIT. The State CISO shall be responsible for carrying out the ECSP, and may delegate activities related to the ECSP to appropriate experienced and knowledgeable OIT staff.

3. Duties of State Agencies:

a. Follow the ECSP and activities associated with the ECSP in collaboration with the State CISO and other OIT staff.

C. Duties of Institutions of Higher Education:

1. Submit a report concerning the development and implementation of the institution’s information security program and compliance to the Department of Higher Education according to the specifications of C.R.S. § 24-37.5-404.5. 5.6 Cybersecurity Plan Submission A. ACSPs and ECSPs are due annually, on or before July 15 of each year.

2. Each non-consolidated agency shall submit their ACSP to the State CISO for review and approval.

a. The State CISO or delegated OIT staff with appropriate experience and knowledge are available on request to consult with and support agencies with completing the ACSP.

2. The Department of Higher Education shall submit the information security program and compliance reports from institutions of higher education to the State CISO according to the provisions of C.R.S. § 24-37.5-404.5.

3. The State CISO shall submit the ECSP to the State CIO for review and approval.

B. An ACSP or an ECSP shall include the following sections, at a minimum:

1. Cover letter.

2. OIT Cybersecurity Review Template or information security review based on the most recent version of the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), available at www.nist.gov/cyberframework.

3. Plan of Action and Milestones (POA&M) related to prioritized items from the completed Cybersecurity Review Template, identified risks, and any other security priorities identified by the agency.

4. Documents numbered 2 through 3, above, are not public records subject to disclosure through the Colorado Open Records Act pursuant to Sections 24-72-202(6)(b)(X), C.R.S. and 24-72-202(6)(b)(XII), C.R.S.

Each such document and any supporting materials shall be labeled “Confidential” and “Not a Public Record.”

C. The State CISO or designee shall meet with the agency to discuss the ACSP, vulnerabilities, and priorities for action.

D. The State CISO shall meet with the Department of Higher Education to discuss all reports concerning the development and implementation of information security programs and compliance with § 24-37.5-404.5, C.R.S. that have been received by the Department of Higher Education for that year.

E. The State CISO shall review and approve, conditionally approve, or disapprove each ACSP based on evaluation of the documentation and discussion with the Agency Designated Information Security Officer.

1. On or before September 15, the State CISO shall send a notice of approval, conditional approval, or disapproval to the Agency Designated Information Security Officer.

a. An approval notice shall confirm the agency’s compliance with the requirements of the cybersecurity plans.

b. A conditional approval notice shall specify the areas of concern and corrective action to address the issue. A conditional approval notice shall also be sent to the head of the agency.

c. A disapproval notice shall specify the reason for the disapproval and corrective action to address the issue. A disapproval notice shall also be sent to the head of the agency, the Governor and the State CIO.

d. A notice of failure to submit shall describe the attempts to acquire an ACSP from the agency. A notice of failure to submit shall also be sent to the head of the agency, the Governor and the State CIO.

2. ACSP disapproval may occur but is not limited to the following instances:

a. Failure to submit an ACSP to the State CISO by July 15.

b. Failure to meet and discuss the ACSP with the State CISO or designee.

3. The State CISO may delegate review and evaluation activities to appropriate experienced and knowledgeable OIT staff. The final decision to approve or disapprove each ACSP may not be delegated. 5.7 Exceptions or Extensions A. In exceptional circumstances, an agency may request a temporary exception to these rules or a deadline extension if it can demonstrate that compliance would result in undue hardship or significant operational challenges. Exception or extension requests must be submitted in writing through the agency's IT Director to the State CISO, explaining the circumstances necessitating the exception or extension and a timeline for achieving compliance with the rules.

B. The State CISO or delegate will review exception or extension requests on a case-by-case basis and may grant exceptions or extensions if they are deemed necessary and appropriate. Granted exceptions or extensions may be temporary or subject to specific conditions or limitations, and will be reviewed periodically to ensure they remain justified and aligned with the overall goals of the rules. 5.8 Materials Incorporated by Reference A. The National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF), available at www.nist.gov/cyberframework, in effect as of February 26, 2024, is hereby incorporated into 8 CCR 1501-5, Rules in Support of the Colorado Information Security Act by reference pursuant to C.R.S. §24-4- 103(12.5), and does not include any later amendments.

B. The NIST CSF incorporated by reference into these rules is available at no cost in an electronic form online at www.nist.gov/cyberframework.

C. The Colorado Governor’s Office of Information Technology also maintains a copy of the policies, rules, and standards incorporated by reference into these rules, which is available from the office during regular business hours. 5.9 Severability If any provision of these Rules in Support of the Colorado Information Security Act, 8 CCR 1501-5, is found to be invalid by a court of competent jurisdiction, the remaining provisions of these rules shall remain in full force and effect.

Editor’s Notes

History Entire rule eff. 12/30/2013.

Entire rule eff. 06/30/2026.

8 CCR 1501-6 RULES IN SUPPORT OF THE OFFICE OF INFORMATION TECHNOLOGY [Repealed eff. 04/14/2026] {#sec-8-ccr-1501-6 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-6}

Office of the Governor Governor’s Office of Information Technology RULES IN SUPPORT OF THE OFFICE OF INFORMATION TECHNOLOGY - REPEALED EFF. 04/14/2026 8 CCR 1501-6 [Editor’s Notes follow the text of the rules at the end of this CCR Document.]

Editor’s Notes

History Entire rule eff. 12/01/2009.

Entire rule repealed eff. 04/14/2026.

8 CCR 1501-7 Rule in Support of Centralized It Management and Creation of Enterprise Architecture Office and Data Management Program {#sec-8-ccr-1501-7 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-7}

OFFICE OF THE GOVERNOR

Governor’s Office of Information Technology

RULE IN SUPPORT OF CENTRALIZED IT MANAGEMENT AND CREATION OF ENTERPRISE

ARCHITECTURE OFFICE AND DATA MANAGEMENT PROGRAM

8 CCR 1501-7 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 1 Authority This rule is adopted pursuant to § 24-37.5-104 CRS and the State Administrative Procedure Act § 24-4- 101 et seq. CRS. 2 Scope and Purpose A. This regulation shall govern every State agency ("Agency") as defined in C.R.S 24-37.5-102(4), and all of its respective officers, departments, divisions, commissions, boards, bureaus, and institutions.

B. The purpose is to formalize strategic alignment of IT investments with state policy priorities, IT policy and standards, while reducing duplication and overlap, pursuant to § 24-37.5-105(9) CRS. 3 Applicability The provisions of this section shall be applicable to state agencies as defined above that manage and administer Information Technology intended to capture, store, process, manage, or transmit data. 4 Definitions A. Chief Information Officer – see § 24-37.5-102(1) CRS B. Chief Information Security Officer – see § 24-37.5-403(1), (2) CRS C. Office of Enterprise Architecture– The Office of Enterprise Architecture (OEA) is the unit within the Governor’s Office of Information Technology that will manage both the Enterprise Architecture and Data Management programs.

D. Enterprise Architecture (EA) is a comprehensive framework used to manage and align an organization's IT assets, people, operations, and projects with its operational characteristics. In other words, the enterprise architecture defines how information and technology will support the business operations and provide benefit for the business.

E. Information Technology (IT) – see § 24-37.5-102(2)

F. Data Management (DM) is an ongoing, centralized administrative function that consists of the planning and execution of policies, practices, and projects that acquire, control, protect, deliver, and enhance the value of data and information assets. Responsibilities typically assigned to this function include data and information strategy planning; data governance; data architecture management; data development; database operations management; data security management; reference and master data management; data warehousing and business intelligence management; document and content management; meta-data management; and, data quality management. 5 Responsibilities and Requirements A. The purpose of the OEA within the Governor’s Office of Information Technology (OIT) is to deliver agile business solutions enabling connected government services.

(1) The OEA has the following responsibilities:

a. Develop a comprehensive EA framework and repository across the agencies to ensure the alignment between the business strategy and the supporting technical and data architectures;

b. Develop processes and procedures to review agency architectural documentation as deemed necessary;

c. Review agency architectural documentation and provide feedback to agencies in a timely manner;

d. Set enterprise standards for all technical domains;

e. Establish processes necessary for implementing new technologies and systems in response to the State’s changing business needs;

f. Coordinate and leverage existing state investments in information technology infrastructure;

g. Identify interdependencies between enterprise projects;

h. Establish collaborative and cooperative relationships with public and private sector organizations to invest strategically in enterprise technology assets and promote reusability;

i. Enforce architectural standards across the enterprise; and, j. From time to time review its mission and update policies and standards as deemed necessary.

(2) State Agency Requirements a. Each agency shall provide baseline architectural documentation based on OEA templates and guidelines within 180 business days of delivery of templates;

b. Agencies shall go through an architectural documentation update and review process based on process and procedures determined by the OEA;

c. Agencies shall implement new, modified or updated functionality, applications, technologies and systems in accordance with standards, policies, and guidelines developed by the OEA.

d. Agencies shall comply with other data management policies, procedures and standards as developed by the OEA.

B. The purpose of the DM Program within the OEA is to leverage data and information as enterprise assets and to establish standards and processes to enable more agile solutions and government services.

(1) The Data Management Program has the following responsibilities:

a. Ensure that data and information assets are known, usable, reusable, and can be accessed when and where needed;

b. Develop processes and procedures to review agency data documentation as deemed necessary;

c. Review agency data documentation and provide feedback to agencies in a timely manner;

d. Establish common policies, procedures and standards to maximize the sharing and investment in information resources;

e. Coordinate and leverage existing state investments in data and information resources;

f. Create policies and procedures to facilitate data and information sharing among the various agencies.

g. Develop appropriate security and privacy policies to protect data assets, by working in conjunction with the Office of Cyber Security on data security management and the Attorney General’s Office on privacy concerns;

h. Establish collaborative and cooperative relationships with public and private sector organizations to invest strategically in data and information assets and promote reusability; and, i. From time to time review its mission and update policies and standards as deemed necessary.

(2) State Agency Requirements a. Each agency shall provide baseline data documentation based on OEA templates and guidelines within 180 business days of delivery of templates;

b. Agencies shall go through a data documentation update and review process based on process and procedures determined by the OEA;

c. Agencies shall implement data management standards in accordance with standards, policies, and guidelines developed by the Governor’s Office of Information Technology.

d. Agencies shall comply with the metrics and reporting requirements developed by the OEA.

e. Agencies shall comply with other data management policies, procedures and standards as developed by the OEA.

C. Request for Extension of Time - If any agency finds that they are unable to complete the requirements set out in section 5 A and B within the 180 day requirement, they may request an extension of time. The request for an extension must be made in writing, and submitted to the CIO or his/her designee no later than 60 days before the 180 day time period expires. The request must state the reason for the delay and the anticipated timeframe for completion. Such a request does not guarantee an extension of time. The agency should continue to work within the 180 day timeframe until they hear from OIT. An extension of time will not be unduly withheld. The CIO or his/her designee will work with the agency to assure compliance with the rule. 6 Requests for Exemption Should an agency find that a Federal program with which it must comply requires an exemption from this

rule, a formal request in writing shall be submitted to the State CIO for review and determination.

A The agency exemption request must be submitted prior to developing, procuring, or deploying any technology or failing to comply with a requirement specified by OIT.

B The exemption shall only be for the portion of the Federal requirement that falls outside of the State policies and standards.

C Exemptions will only be made on a requirement-by-requirement basis for a project or program, and will not automatically cover an entire project.

D Considerations to be weighed by the State CIO or their designee in evaluating an agency request for exemption to enterprise architecture or data management standards include, but are not limited to:

(1) Agency business rationale for use of non-standard;

(2) The degree to which the requested non-standard would materially inhibit the State from ensuring that its information resources fit together in a statewide system capable of providing ready access to and sharing of information, computing or telecommunications resources;

(3) The degree to which the requested non-standard would interfere with the State’s goal of acquiring and using enterprise information technology resources in the most integrated, interoperable, efficient and economical manner possible; and, (4) Other factors deemed to be relevant by the State CIO. _________________________________________________________________________ Editor’s Notes

History Entire rule eff. 01/30/2010.

8 CCR 1501-8 RULES IN SUPPORT OF THE GOVERNOR’S OFFICE OF INFORMATION TECHNOLOGY PUBLIC SAFETY TRUST FUND [Repealed eff. 06/30/2024] {#sec-8-ccr-1501-8 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-8}

OFFICE OF THE GOVERNOR

Governor's Office of Information Technology RULES IN SUPPORT OF THE GOVERNOR’S OFFICE OF INFORMATION TECHNOLOGY PUBLIC SAFETY TRUST FUND - Repealed eff. 06/30/2024 8 CCR 1501-8 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ Editor’s Notes

History Entire rule eff. 04/14/2014.

Entire rule repealed eff. 06/30/2024.

8 CCR 1501-9 Colorado Rules Regarding Electronic Transactions by Colorado Governmental Agencies {#sec-8-ccr-1501-9 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-9}

OFFICE OF THE GOVERNOR

Governor’s Office of Information Technology COLORADO RULES REGARDING ELECTRONIC TRANSACTIONS BY COLORADO GOVERNMENTAL AGENCIES 8 CCR 1501-9 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________

PURPOSE

The purpose of these rules is to promote the development and use of electronic transactions by Colorado governmental agencies in accordance with CRS 24-71.3-101 et seq. These rules identify the covered Colorado governmental agencies, define key terms, and require Colorado governmental agencies follow the policies established by the Governor’s Office of Information Technology (“OIT”) that: (i) require electronic transactions to be created by an authorized technology in order to be presumed valid; (ii) set forth criteria for determining if a technology is authorized; (iii) identify presently authorized technologies;

(iv) provide a mechanism for authorizing new technologies; and (v) establish, approve, monitor and modify security requirements associated with electronic transactions.

STATUTORY AUTHORITY

CRS 24-37.5-101 et seq.

CRS 24-71-101 et seq.

CRS 24-71.3-101 et seq.

R1 Scope of Rules These Rules apply to any Colorado governmental agency transaction subject to CRS 24-71-101 and 24- 71.3-101 et seq.

R2 Definitions The definitions set forth in this Rule supplement the definitions set forth in CRS 24-71.3-102.

A. “Electronic Transaction” means an electronic action or set of actions occurring between two or more persons relating to the conduct of business, commercial, charitable, or governmental affairs.

B. “Policy Authority” means the entity that establishes standards, policies, and procedures governing electronic transactions subject to this Rule. The Governor’s Office of Information Technology, as established by CRS 24-37.5-101 et seq., will serve as the Policy Authority.

C. “State Agency” means the departments, divisions, commissions, boards, bureaus, and institutions defined in CRS 24-37.5-103(4).

Governor’s Office of Information Technology R3 Authorized Technologies for Electronic Transactions The Policy Authority will authorize technologies for use by Colorado governmental agencies in electronic transactions. Electronic transactions with Colorado governmental agencies must employ a technology authorized by the Policy Authority.

R4 Identification of Authorized Technologies A. The Policy Authority will review and authorize the use of technologies for electronic transactions by Colorado governmental agencies.

B. Procedure for Authorizing Technologies 1. Any person may petition the Policy Authority to review a technology for use in electronic transactions by providing a written request for review.

2. The petition must include a full explanation of the technology and show that it meets the security requirements and any additional applicable requirements established by the Policy Authority.

3. The Policy Authority has one hundred twenty (120) days from the date of receipt of the petition to review and to accept or reject the petition.

4. If the Policy Authority finds that the petitioner’s proposed technology meets the security requirements and any additional applicable requirements, the Policy Authority will authorize use of the technology by Colorado governmental agencies.

5. If the proposed technology is rejected, the petitioner may appeal the decision through the Administrative Procedure Act, CRS 24-4-101 et seq.

R5 Security Colorado governmental agencies seeking to use electronic transactions must adhere to the standards, policies, and procedures established by the Policy Authority concerning the security of electronic transaction technology.

R6 Presumption of Validity and Burden of Proof If an electronic transaction is entered into by a Colorado governmental agency that conforms to the standards, policies, and procedures established by the Policy Authority, the electronic transaction will be presumed valid. It will be the burden of the party contesting the validity of the electronic transaction to overcome this presumption.

R7 Suspension of Electronic Transactions In the event a State Agency fails to adhere to this Rule or the standards, policies, and procedures established by the Policy Authority, the Policy Authority may discontinue or suspend that State Agency’s use of electronic transactions until compliance with this Rule is established. _________________________________________________________________________ Editor’s Notes

History New rule eff. 03/20/2017.

8 CCR 1501-11 Rules Establishing Technology Accessibility Standards {#sec-8-ccr-1501-11 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-11}

OFFICE OF THE GOVERNOR

RULES ESTABLISHING TECHNOLOGY ACCESSIBILITY STANDARDS

8 CCR 1501-11 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 11.1 Authority The Chief Information Officer in the Office of Information Technology is authorized by the provisions of

section 24-37.5-106 (4), C.R.S. and section 24-85-103, C.R.S. to establish rules regarding accessibility standards for an individual with a disability for information technology systems employed by state agencies.

The rules are intended to be consistent with the requirements of the State Administrative Procedures Act,

section 24-4-101 et seq., C.R.S. (the “APA”). 11.2 Scope and Purpose A. The purpose of these rules is to define the accessibility standards and compliance parameters for individuals with a disability for information technology systems. The reason for the rules is to improve the accessibility and usability of government information technology products and services in Colorado.

B. The rules recognize that technology and accessibility standards are evolving and, given the diversity of needs of residents of our state, there is no standard that can guarantee universal access. Therefore, to make information technology accessible, these rules also acknowledge that reasonable accommodations or modifications are an important component of compliance.

C. The rules apply to all information and communication technology (ICT) in active use, whether public-facing or internal-facing, that the public entity provides or makes available directly or through contractual, licensing, or other arrangements.

D. Compliance with these rules does not necessarily ensure compliance with other laws, rules, and regulations. 11.3 Applicability

Section 24-34-802(1)(c), C.R.S. specifies that the accessibility standards for individuals with a disability as established by these rules apply to public entities as defined in section 24-34-301(18), C.R.S. Public entities must fully comply with these standards established pursuant to section 24-85-103(2.5), C.R.S.

The rules apply to all ICT that is in active use on or after July 1, 2024 and any ICT that is newly created, developed, acquired, altered, updated, or purchased on or after July 1, 2024. The rules also apply when an accessible version of ICT not currently in active use is requested by an individual with a disability.

These rules do not require a public entity to take any action that is otherwise exempted under these rules.

Nothing in these rules shall be construed to create new obligations beyond those which already exist under the Individuals with Disabilities Education Act, the Exceptional Children’s Education Act, Section 504 of the Rehabilitation Act, or any other applicable state or federal law related to the delivery of educational programing, extracurricular activities, and related services directly to students in public schools serving students at Kindergarten through grade 12. However, such entities retain an obligation to comply with these rules for all other purposes not involving direct services to students. 11.4 Definitions Accessible or accessibility: has the same meaning as defined in section 24-85-102(1.5), C.R.S., or as superseded by a future statute, which is perceivable, operable, and understandable digital content that reasonably enables an individual with a disability to access the same information, engage in the same interactions, and enjoy the same services offered to other individuals, with the same privacy, independence, and ease of use as exists for individuals without a disability.

Accessibility standards for individuals with a disability: as used in section 24-34-802(1)(c), C.R.S. means these rules, 8 CCR 1501-11 Rules Establishing Technology Accessibility Standards.

Active use: For public-facing ICT, active use means ICT that is currently used by members of the public as a primary means to apply for, gain access to, or participate in a public entity's services, programs, or activities. For internal-facing ICT, active use means ICT currently used by employees to perform their job duties. ICT in active use includes the authorized, official version or versions. ICT in active use does not include previous versions that may still be available, archived content, archivist materials, working products, deliberative materials, or drafts.

Applicable and achievable: In the context of technical specifications, standards, or outcomes, applicable and achievable means all technical specifications, standards, or outcomes which are assessable and/or whose elements, artifacts, or functionality are present in an ICT asset.

Archived content: ICT that is: (1) retained exclusively for reference, research, or recordkeeping; (2) not altered or updated after the date of archiving; and (3) is organized, stored, or marked in a manner that clearly identifies the ICT as being archived.

Archivist materials: Historical or legacy digital content that: (1) is preserved or retained solely for its cultural, educational, or historic value and is not required for the operation of or access to any governmental entity’s services, programs, or activities and (2) either (i) was converted to a digital format before July 1, 2024; (ii) is a reproduction of a physical record, such as a photograph, manuscript, or other non-digital artifact, that has been digitized but is not intended for interactive use; or (iii) has been transferred to the Colorado State Archives by a governmental entity or office in the State of Colorado or otherwise designated for permanent retention by the State Archivist.

Closed functionality: Characteristics that limit functionality or prevent a user from attaching or installing assistive technology. Examples of ICT with closed functionality are self-service machines, information kiosks, set-top boxes, fax machines, calculators, interactive whiteboards, ebook readers, and computers that are locked down so that users may not adjust settings due to a policy such as Desktop Core Configuration.

Conforming alternate version: An accessible version of content or functionality provided in a different format as set forth in section 11.8.

Conventional electronic documents: ICT that is a static, digital file created, stored, or accessed using computer systems and designed for offline use. Examples of conventional electronic document file types and categories include: portable document format (PDF), word processor file formats (DOC/DOCX, RTF, WPD), presentation file formats (PPT/PPTX), spreadsheet file formats (XLS/XLSX, CXV, ODS), computer-aided design files (CWG, DXF), geospatial files (KML/KMZ, SHP), and databases (MDB, SQL).

Digital Content: Any ICT created, shared, or accessed through digital platforms, including electronic documents, websites, mobile applications, and online services. Digital Content does not include ICT with closed functionality or hardware.

Direct threat: a significant risk to the health or safety of others that cannot be eliminated by a modification of policies, practices or procedures, or by the provision of auxiliary aids or services.

Fundamental alteration: a change in the essential nature of the public entity’s program, service, or activity.

Hardware: a tangible device, piece of equipment, or physical component of ICT, such as telephones, computers, multifunction copy machines, and keyboards.

Information and communication technology (ICT): Information technology and other equipment, systems, technologies, or processes, for which the principal function is the creation, manipulation, storage, display, receipt, or transmission of electronic data and information, as well as any associated content. Examples of ICT include, but are not limited to: computers and peripheral equipment; information kiosks and transaction machines; telecommunications equipment; customer premises equipment; multifunction office machines; software; applications; web sites; videos; and, electronic documents. The term does not include any equipment that contains embedded information technology that is used as an integral part of the product, but the principal function of which is not the acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. However, if the embedded information technology has an externally available web or computer interface, that interface is considered ICT. For example, Heating, Ventilation, and Air Conditioning (HVAC) equipment such as thermostats or temperature control devices, and medical equipment where information technology is integral to its operation are not considered information technology.

Internal-facing ICT: ICT that is necessary to allow an employee of a public entity to perform their job duties for the public entity.

Public entity: has the same meaning as defined in section 24-34-301(18), C.R.S., or as superseded by a future statute, which is: (a) Any state or local government; or (b) Any department, agency, special district, or other instrumentality of a state or local government.

Public-facing ICT: ICT that is necessary to allow a person to apply for, gain access to, or participate in the public entity's programs, services, and activities.

Reasonable accommodation: as it pertains to internal-facing ICT, reasonable accommodation is a change or adjustment to a job or work environment that will enable a qualified individual with a disability to access internal-facing ICT.

Reasonable modification: as it pertains to public-facing ICT, reasonable modification is a change in policies, practices, or procedures that is necessary to enable an individual with a disability to access public-facing ICT in order to access the public entity’s programs, services, and activities.

Section 508, Section 508 of the Rehabilitation Act: Unless a specific citation is provided, Section 508 refers to the ICT Standards and Guidelines (also known as “Standards and Guidelines”), under Section 508 of the Rehabilitation Act and Section 255 of the Communications Act, as issued on Jan. 18, 2017 and corrected on Jan. 22, 2018 by the U.S. Access Board and not including any later amendments or versions.

Single digital product: as used in section 24-34-802(2)(b), C.R.S. means ICT that share a common

purpose, intended to support a single program or service, created by the same author, group, or organization, including:

A. Electronic communications B. Digital documents like PDFs and graphics C. Mobile applications D. Desktop applications E. Websites F. Digital kiosks G. Input devices H. Digital video files I. Audio recordings Technical standards: as used in these rules, technical standards refers to the following:

A. For Digital Content, the applicable and achievable success criteria of the W3C WCAG 2.1 conformance levels A and AA, as published on Sep. 21, 2023, not including any later amendments or versions, hereby incorporated by reference and available from the Office of Information Technology during regular business hours or from the World Wide Web Consortium.

Criteria or standards should be read, interpreted, and applied substituting references for “web” or “web content” with “software”, “application”, “document”, or other appropriate term.

B. For ICT with closed functionality, such products must interoperate with assistive technology, provide documentation on accessibility features, and provide user control over accessibility features; and conform with all applicable and achievable success criteria of the W3C WCAG 2.1 conformance levels A and AA, as published on Sep. 21, 2023, not including any later amendments or versions, hereby incorporated by reference and available from the Office of Information Technology during regular business hours or from the World Wide Web Consortium.

C. For hardware, all applicable and achievable requirements of the standards contained in Chapter 4 of the Information and Communication Technology (ICT) Standards and Guidelines under Section 508, including Standards 402, 404, 407, 408, 409, 410, and 411, as corrected on Jan. 22, 2018, not including any later amendments or versions, hereby incorporated by reference and available from the Office of Information Technology during regular business hours or from the U.S. Access Board.

Undue burden: as it pertains to public-facing ICT, refers to the standard as construed by C.R.S. § 24-34- 601, et seq., C.R.S. § 24-34-802, Title II of the Americans with Disabilities Act, and Section 508 of the Rehabilitation Act, and the related conforming and implementing regulations.

Undue hardship: as it pertains to internal-facing ICT, refers to the standard as construed by C.R.S. § 24- 34-401, et seq. and Title I of the Americans with Disabilities Act and the related conforming and implementing regulations.

Web Content Accessibility Guidelines (WCAG): a single shared standard for web content accessibility that meets the needs of individuals, organizations, and governments internationally, as published by the World Wide Web Consortium (W3C). (https://www.w3.org/WAI/standards-guidelines/wcag) 11.5 Compliance Requirements Each public entity shall make their ICT that is in active use accessible by meeting one of the following:

A. Meeting the Technical Standards unless exempt under section 11.7 or 11.10;

B. Utilizing a conforming alternate version in accordance with section 11.8 unless exempt under

section 11.10;

C. Providing reasonable modifications or accommodations, when requested, to remove accessibility barriers unless exempt under section 11.10. When providing reasonable modification or accommodations, a public entity cannot require an individual with a disability to pay to cover the cost of measures, such as providing auxiliary aids or barrier removal, that are required to provide that individual with nondiscriminatory treatment;

D. Publishing an Accessibility Plan which shows evidence of the public entity’s good faith progress towards removing accessibility barriers across its inventory of ICT in active use unless exempt under section 11.10. The Accessibility Plan must be published on the public entity's website. To demonstrate good faith, the Accessibility Plan must be updated annually with progress the public entity has made on advancing technology accessibility. The Accessibility Plan may include but is not limited to the following: (i) how the public entity is prioritizing ICT in active use with consideration of how the ICT will impact the public entity and its users, including aspects such as legal requirements, user impact, usage metrics, and importance of the program, service, or activity; (ii) the steps the public entity is taking to remove accessibility barriers in their ICT; (iii) timelines (if appropriate or available) to address inaccessible ICT; (iv) the availability of reasonable accommodations and modifications; and (v) procedures for regular testing and remediating ICT; or E. Procuring and providing reasonable accommodations or modifications, if needed, for the ICT that best meets the technical standards and also the public entity’s business needs unless exempted by section 11.10. These could include but are not limited to considerations such as audience needs, capacity, reliability, interoperability, organizational needs, privacy, and security.

A public entity has complied with their obligations under this rule if they have: (i) met any single, or a combination of, the compliance options set forth in 11.5; and (ii) posted the Technology Accessibility Statement required under section 11.6. 11.6 Technology Accessibility Statement Requirement A. Each public entity shall develop and publicly post in a conspicuous place, like on the public entity’s primary website or application, a technology accessibility statement.

B. The technology accessibility statement shall include, at a minimum:

1. A commitment to advancing technology accessibility in the public entity’s ICT and the steps the public entity is taking to remove accessibility barriers to ICT.

2. A commitment to a timely response to reports of inaccessible ICT or requests for a reasonable accommodation or modification.

3. A prominent notice informing individuals with disabilities on: (i) how to request reasonable accommodations or modifications; (ii) how to report inaccessible ICT; and (iii) any applicable existing grievance procedures that the public entity is required to maintain under other laws. The notice shall provide more than one contact method, which could include an accessible form to submit feedback, an email address, or a toll-free phone number (with TTY), to contact personnel knowledgeable about the accessibility of the ICT. 11.7 Exceptions The exceptions in this section only apply in situations where a public entity intends to comply with this rule by meeting the Technical Standards under section 11.5.A; it does not apply when a public entity is meeting its compliance requirements under sections 11.5.B – E. This means that if a public entity seeks compliance with this rule by meeting the Technical Standards in section 11.5.A, any ICT covered by an exception need not meet those Technical Standards. The exceptions to the Technical Standards under

section 11.5.A are as follows:

A. Content posted by a third party. Content posted by a third party unless the third party is posting due to contractual, licensing, or other arrangements with the public entity.

B. Individualized, password protected or otherwise secured conventional electronic documents.

Conventional electronic documents that are: (1) about a specific individual, their property, or their account; and (2) password-protected or otherwise secured.

C. Preexisting social media posts. A public entity’s social media posts that were posted before July 1, 2024.

D. Preexisting conventional electronic documents. A public entity’s conventional electronic documents that:

1. Were last updated and made available publicly or internally before July 1, 2024; and 2. Are not currently used to apply for, gain access to, or participate in the public entity’s services, programs, or activities; and 3. Are not currently used by employees to perform their job duties.

E. Substantially equivalent access and ease of use. An individual with a disability is not substantially hindered, with reasonable accommodations or modifications if needed, from accessing or engaging effectively in the same or substantially equivalent services, programs, and activities that the public entity offers through its ICT to those without disabilities, with substantially equivalent ease of use.

F. ICT with closed functionality. Public entities are subject to the federal exemptions enumerated in 508 Chapter 2. Exceptions should be read, interpreted, and applied using “Colorado Standards for Technology Accessibility" in place of “Revised 508 Standards.”

Even if an exception under this section 11.7 applies to a particular ICT, the public entity is only exempt from the Technical Standards set forth in section 11.5.A. The public entity remains obligated to make the ICT accessible by meeting one of the other compliance obligations under section 11.5, unless doing so would constitute an undue hardship, undue burden, fundamental alteration, or direct threat pursuant to

section 11.10. 11.8 Conforming Alternate Versions A public entity may use conforming alternate versions of ICT to comply with these rules only where it is not possible to make the ICT directly accessible due to technical or legal limitations.

A. Alternate versions must:

1. Provide all of the same information and functionality in the same human language;

2. Be as up-to-date as the non-conforming version;

3. Be as readily available as the non-conforming version; and 4. Conform to the technical standards or meet the requirements through equivalent facilitation.

B. Digital content: Alternate versions may be created whose number of pages varies from the original. Alternate versions may be provided for:

1. A part of a web page, entire web pages, or an entire site;

2. A part of an electronic document or an entire electronic document; or 3. Any information conveyed in a digital format.

C. ICT with closed functionality: Alternate versions are generally not available. Equally effective alternative access using a separate product may be acceptable. Alternate products must ensure the same access to all functionality and information.

D. Installed software: Alternate versions must be compatible with the originally supported device(s) and operating system(s) or made available as a web application. 11.9 Equivalent Facilitation Nothing in these rules prevents the use of designs, methods, or techniques as alternatives to those prescribed, provided that the alternative designs, methods, or techniques result in substantially equivalent or greater accessibility and usability of the ICT.

As an example, for instance, WCAG success criterion 3.3.4 requires that user submissions are automatically checked to prevent common errors in legal or financial transactions made through websites.

If a public entity failed to do this (thus violating WCAG) but requires all users to separately verify important transactions in person and outside of its website prior to processing the transaction, it would meet this requirement through equivalent facilitation. 11.10 Undue Hardship, Undue Burden, Fundamental Alteration, or Direct Threat A. A public entity is not required to meet any of the compliance requirements in section 11.5 if doing so would result in an undue hardship, undue burden, fundamental alteration, or direct threat.

B. For public-facing ICT, where a public entity has concluded that compliance with section 11.5 would result in a fundamental alteration in the nature of a service, program, or activity, or an undue burden, said decision must be made by the head of the public entity or their designee after considering all available resources, and the extent to which conformance would impose significant difficulty or expense. The decision must be accompanied by a written statement of the reasons for reaching that conclusion. Undue burden determinations may include, but are not limited to the following:

1. The resources of the program, service, or activity are not readily available, or the use of such resources would fundamentally alter the nature of the program, service, or activity;

2. Contractual, legal, regulatory, or technical constraints prevent the modification of the program, service, or activity; or 3. When the necessary auxiliary aids or services are not feasibly available.

C. In determining whether compliance with section 11.5 would pose a direct threat to the health or safety of others, a public entity must make an individualized assessment, based on reasonable judgment that relies on the best available objective evidence, to ascertain:

1. the nature, duration, and severity of the risk;

2. the probability that the potential injury will actually occur; and 3. whether reasonable modifications of policies, practices, or procedures or the provision of auxiliary aids or services will mitigate the risk. 11.11 Materials Incorporated by Reference A. The following standards are hereby incorporated by reference into 8 CCR 1501-11 Rules Establishing Technology Accessibility Standards, pursuant to C.R.S. §24-4-103(12.5), and do not include any later amendments.

3. The World Wide Web Consortium (W3C) Web Content Accessibility Guidelines (WCAG) version 2.1 conformance levels A and AA, as published on Sep. 21, 2023, incorporated by reference into these rules is available at no cost in electronic form online at https://www.w3.org/TR/WCAG21/ 2. US Section 508 of the Rehabilitation Act of 1973, as issued on Jan. 18, 2017 and corrected on Jan. 22, 2018, incorporated by reference into these rules is available at no cost in electronic form online at https://www.access-board.gov/ict/#chapter-4-hardware B. The Colorado Governor’s Office of Information Technology also maintains a copy of the policies, rules, and standards incorporated by reference into these rules, which is available from the office during regular business hours. 11.12 Severability If any provision of these Rules Establishing Technology Accessibility Standards, 8 CCR 1501-11, is found to be invalid by a court of competent jurisdiction, the remaining provisions of these rules shall remain in full force and effect. _________________________________________________________________________ Editor’s Notes

History New rule eff. 04/14/2024.

Entire rule eff. 06/30/2025.

8 CCR 1501-12 Information Technology Lifecycle Planning {#sec-8-ccr-1501-12 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-12}

OFFICE OF THE GOVERNOR

INFORMATION TECHNOLOGY LIFECYCLE PLANNING

8 CCR 1501-12 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 12.1 Authority The Chief Information Officer in the Office of Information Technology (OIT) is authorized and directed by the provisions of section 24-37.5-106 (4), C.R.S. and section 24-37.5-126, C.R.S. to promulgate rules to establish a technology lifecycle plan. The rules enable the development and delivery of the annual fiscal impact analysis, as directed in section 24-37.5-127 (3), C.R.S., and the annual estimate of the state’s technical debt environment, as directed in section 24-37.5-805, C.R.S.

The rules are intended to be consistent with the requirements of the State Administrative Procedure Act,

section 24-4-101 et seq., C.R.S. (the “APA”). 12.2 Scope and Purpose A. The primary goal is to ensure that technology supports the mission of providing government services. Information technology must be reliable, predictable, and perform adequately to fulfill its intended purpose.

B. These rules ensure that the State of Colorado's information technology assets and systems are inventoried, categorized, and managed. This allows the State to make well-informed decisions and develop effective strategies for growth, scalability, cost optimization, privacy, security, consistent workflows, stability, reliability, and customer experience.

C. The rules address various factors that impact the lifecycle cost of technology, including information security risks, infrastructure risks, operating cost misalignment, productivity cost misalignment, and talent depreciation.

D. These rules enable the State to plan for the orderly and predictable funding, acquisition, deployment, operation, maintenance, and decommissioning of IT assets. 12.3 Applicability A. The rules apply to all IT assets used by state agencies as defined in section 24-37.5-102(28), C.R.S., including all IT capital projects that receive funding from the capital construction section of the annual general appropriation act. These IT assets encompass IT infrastructure, information systems, applications, databases, cloud services, and other IT equipment.

B. The rules apply to state agencies as defined in section 24-37.5-127(1)(h), C.R.S. for all information technology capital projects that receive an appropriation in the capital construction

section of the annual general appropriation act, beginning with the fiscal year 2025-26 annual general appropriation act. 12.4 Definitions Cloud service: A cloud service is any type of computing resource or service that is delivered over the internet rather than being hosted or managed on-premises. These services can include:

A. Infrastructure as a Service (IaaS): Providing fundamental computing resources like servers, storage, and networking.

B. Platform as a Service (PaaS): Offering a cloud-based platform for developing, running, and managing applications using programming languages and tools supported by the provider.

C. Software as a Service (SaaS): Delivering ready-to-use software applications over the internet, typically accessed through a web browser or mobile app, without local installation or maintenance.

Consolidated agency: This term refers to executive branch agencies whose IT functions were consolidated under OIT on July 1, 2008, pursuant to SB 08-155 and defined in C.R.S. 24-37.5-102(28).

Information technology annual depreciation-lease equivalent (ADLE) payment: Has the same meaning as defined in C.R.S. 24-37.5-127(1)(f), which means an amount equivalent to the recorded depreciation or amortization of the information technology asset acquired, repaired, improved, replaced, renovated, or constructed with an appropriation from the information technology capital account in the capital construction fund based on the depreciation period, as calculated by the state agency or the state institution of higher education, which calculation a state institution of higher education shall report to the Department of Higher Education. The amount is calculated from the date of acquisition or completion of the repair, improvement, replacement, renovation, or construction to June 30 of the fiscal year of acquisition or completion. The amount continues to be annually calculated on a fiscal year basis until the depreciation for the information technology asset is no longer recorded.

IT asset: Any software, hardware, or virtual machine that is used in the acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information within an information technology environment and that:

A. Connects to a state agency network either directly or indirectly via a link to other IT assets that are connected to a state agency network; or B. Needs operational support, which may come from a state agency, OIT, a vendor, or another source.

IT assets include but are not limited to:

1. Physical resources like servers, routers, and switches;

2. Logical resources like software, middleware, operating systems, applications, data files, cloud services, consolidated data center services;

3. IT communications resources like local area networks (LANs) and wide area networks (WANs) and their components;

4. Devices connected to a state agency’s network include network-connected TVs, HVAC equipment, electric vehicles, cameras, and drones.

IT assets do not include:

1. Consumables and peripheral devices like keyboards, projectors, speakers, scanners, monitors, and mice;

2. Cell phones and mobile devices;

3. Printers;

4. Devices that do not connect to a state agency network;

5. Personal devices that are not owned or supported by OIT or a state agency.

Non-consolidated agency: Refers to any state agency that is not among those executive branch agencies whose IT functions were consolidated under OIT on July 1, 2008, pursuant to SB 08-155 and defined in C.R.S. 24-37.5-102(28).

Operating system: Information system software that manages computer hardware, software resources and provides common services for computer programs. System software supports and manages a computer's basic functions, such as scheduling tasks, executing applications and controlling peripherals (e.g., monitor, mouse, keyboard, speakers).

Operational support: Refers to ongoing activities and resources required to keep an IT asset functioning effectively and securely throughout its lifecycle within the IT environment. This includes a wide range of functions, such as: maintenance, troubleshooting, monitoring performance, managing configurations, security, providing assistance to users who interact with the IT asset, and end-of-life management.

State agency: Has the same meaning as defined in C.R.S. 24-37.5-127(1)(h), which means any department, commission, council, board, bureau, committee, institution of higher education, agency, or other governmental unit of the executive, legislative, or judicial branch of state government that receives an appropriation or is otherwise included in the annual general appropriation act or the annual legislative appropriation act.

Technical debt: Cost of work needed to bring information technology into a state of general good repair (including replacing code, addressing security risks, moving off of outdated hardware, etc.). Generally, technical debt is characterized by one or more of the following risks or costs:

A. Information security risk, in which the continued operation of the technology is not compliant with modern, generally acceptable standards (e.g., continuing to operate technology after the vendor’s publicly documented end-of-life notification).

B. Infrastructure risk, in which the technology stack is unsustainable based on hardware (e.g., replacement parts are no longer available), software (e.g., developers with the required skill set are no longer available), or foundation (e.g., the data center housing the technology is susceptible to social unrest, weather, etc.).

C. Operating cost, in which running costs no longer align with typical benchmarks for a given piece of software. Note that the opposite – no charge – may also be an indicator of technical debt in that the vendor is no longer charging for the use of the technology and an organization may fall into the trap of continuing to operate deprecated technology past its maintained life.

D. Productivity cost, in which the technology users are unable to produce operational output on par with generally accepted standards (e.g., payroll cost per employee is twice the national standard).

E. Talent depreciation, in which employees sustaining outdated technology lose or no longer have skill sets to remain competitive on the open market.

TIOBE index: The TIOBE programming community index is a measure of popularity of programming languages, created and maintained by the TIOBE Company based in Eindhoven, the Netherlands. The index is calculated from the number of search engine results for queries containing the name of the language. The index covers searches in 25 popular search engines. TIOBE focuses on Turing complete languages, so it does not provide information about the popularity of, for instance, HTML. The TIOBE index is not about the best programming language or the language in which most lines of code have been written, but rather may reflect the number of skilled engineers, courses and jobs worldwide. The TIOBE index is available at no cost in an electronic form online at https://www.tiobe.com/tiobe-index/ 12.5 Inventory of IT Assets A. OIT shall develop, document, and maintain an inventory of state agency IT assets that receive an appropriation in the capital construction section of the annual appropriation act, beginning with the fiscal year 2025-26 annual general appropriation act. OIT uses this inventory to complete legislatively mandated reports that provide a statewide perspective of information technology used by state agencies.

1. Non-consolidated agencies shall contribute data points required by OIT in the format and according to the timing designated by OIT.

2. For the purposes of these rules, non-consolidated agencies shall only report about information technology capital projects subject to ADLE payments.

3. Institutions of higher education shall report to the Department of Higher Education. The Department of Higher Education shall report to OIT. For the purposes of these rules, institutions of higher education shall only report about information technology capital projects subject to ADLE payments.

4. Records for non-consolidated agency IT assets shall be updated by June 1 each year.

B. OIT shall develop, document, and maintain an inventory of consolidated agency IT assets in a system of record designated by OIT. While OIT maintains a centralized IT asset inventory, it is the responsibility of each consolidated agency to provide any additional IT asset inventory information they have available. OIT uses this inventory to complete legislatively mandated reports that provide a statewide perspective of information technology used by state agencies.

1. OIT shall establish a process for the development and maintenance of the IT asset inventory, including a phased approach for initial inventory population, as appropriate.

2. Consolidated agencies shall contribute data points required by OIT in the format and according to the timing designated by OIT.

a. OIT shall approve inventory data before use.

b. The inventory shall include documentation of the connections and relationships between an individual IT asset and other IT assets, when present.

3. IT assets shall be recorded in the system of record designated by OIT.

4. IT assets must be added to the system of record before being connected to the state network or the date they are put in use, whichever occurs first.

5. IT asset records shall be updated by June 30 each year according to the following schedule:

a. IT assets in tier 0 or 1 for either criticality or risk level - update every year and whenever there is a status change like the announcement of the end of manufacturer support.

b. IT assets in tier 2 or 3 for criticality and tier 2 for risk level - update every 1 year.

c. IT assets in tier 3 or 4 for criticality and tier 3 for risk level - update every 2 years.

C. OIT complies with the Colorado Open Records Act (CORA), C.R.S. sections 24-72-200.1, et seq. for all public information requests. The OIT custodian may deny the right of inspection if it is contrary to the public interest, including requests related to security under C.R.S. section 24-72- 204 (VIII). OIT may request a decision from the Office of the Attorney General for all public information requests seeking IT asset inventory information where sensitive security information may be involved. 12.6 Reporting A. On or before November 1 each year, OIT shall deliver an annual report to the Joint Budget Committee (JBC) and Joint Technology Committee (JTC) providing an estimate of the technical debt environment for consolidated agencies.

1. The report shall evaluate the risks associated with the information technology operating landscape, including IT assets that are out of the acceptable tolerance level for one or more of the tolerance boundaries: information security risk, infrastructure risk, operating cost, productivity cost, and talent depreciation.

2. The report shall include an estimate of the cost associated with upgrading IT assets to the acceptable tolerance level in order to move from a higher risk position to an acceptable risk position.

B. On or before June 15 each year, OIT shall deliver an annual fiscal impact analysis to the Office of State Planning and Budgeting (OSPB) for all state agencies, including consolidated agencies, non-consolidated agencies, and institutions of higher education. The analysis shall detail the current IT assets to which ADLE payments are being applied and the estimated amount of general fund money required to make ADLE payments for the coming fiscal year. 12.7 Compliance A. A state agency’s failure to participate in the inventory of IT assets in compliance with these rules shall be noted in OIT’s annual reports to the Office of State Budget Planning (OSPB), the Joint Budget Committee (JBC), and the Joint Technology Committee (JTC) as appropriate. 12.8 Materials Incorporated by Reference A. The following standards are hereby incorporated by reference into 8 CCR 1501-12, Rule 12.9 Tolerance Boundaries for Consolidated Agencies, pursuant to C.R.S. §24-4-103(12.5), and do not include any later amendments.

1. The Center for Internet Security (CIS) Controls, version 8, released May 2021 incorporated by reference into these rules is available at no cost in an electronic form online at https://learn.cisecurity.org/control-download or from Center for Internet Security, Inc., 31 Tech Valley Drive, East Greenbush, NY 12061.

2. The National Institute of Standards and Technology (NIST) Cybersecurity Framework, version 2.0, published February 26, 2024, incorporated by reference into these rules is available at no cost in an electronic form online at https://csrc.nist.gov/pubs/cswp/29/thenist-cybersecurity-framework-csf-20/final or from National Institute of Standards and Technology, 100 Bureau Drive, Gaithersburg, MD 20899.

B. The Colorado Governor’s Office of Information Technology also maintains a copy of the policies, rules, and standards incorporated by reference into these rules, which is available from the office during regular business hours. 12.9 Tolerance Boundaries for Consolidated Agencies Like other physical items, IT assets have a useful lifespan. After a period of time, performance degrades, maintenance costs increase, productivity declines, and repairs and security risks increase. The following boundaries describe the parameters to identify when IT assets exit their optimal functionality and productivity and introduce increased cost and risk.

Non-consolidated agencies may adopt this Rule 12.9 or a similar framework in order to promote consistent state-wide categorization.

The CIS Controls, version 8, released May 2021 and NIST Cybersecurity Framework, version 2.0, published February 26, 2024 are hereby incorporated into the rules by reference, excluding any later amendments.

A. Information Security Tolerances 1. Acceptable a. Asset is under manufacturer maintenance and receiving manufacturer updates and service.

b. Asset conforms to or supports the encryption and security standards established by the National Institute of Standards and Technology (NIST) and Center for Internet Security (CIS) Controls.

2. Marginal a. Asset is no longer supported by the manufacturer through no-cost upgrades, however it can be temporarily supported through an extended fee-for-service agreement.

3. Unacceptable a. End of manufacturer support, manufacturer no longer providing regular maintenance, support, or updates.

b. Lacks, incompatible or unable to meet the encryption and security standards established by the National Institute of Standards and Technology (NIST) and Center for Internet Security (CIS) Controls.

B. Infrastructure Tolerances 1. Acceptable a. Asset exists within, operates, applies, or maintains baseline configurations consistent with the enterprise architecture at the state agency.

b. Asset is compatible with current and planned connections, relationships, and dependent systems.

2. Marginal a. Asset is approaching the end of its useful life within the enterprise architecture at the state agency. Asset must be modernized in accordance with the enterprise architecture to minimize operational impacts to the overall agency ecosystem.

3. Unacceptable a. Asset operates on outdated infrastructure.

b. Asset is incompatible with current and planned connections, relationships, and/or dependent systems.

C. Operating Cost Tolerances 1. Acceptable a. Total of manufacturer and supplier costs are less than the depreciated value of the IT asset.

b. Maintenance support and/or replacement parts available from the manufacturer or supplier.

c. Currently and consistently obtaining maintenance support according to the manufacturer’s service schedule or service agreement.

d. No emergency repairs or maintenance conducted.

2. Marginal a. Cost for manufacturer or supplier service and support agreement is less than the replacement cost but exceeds the current depreciated value of the IT asset.

b. Cost of maintenance exceeds the current depreciated value of the IT asset.

c. Maintenance support and/or replacement parts not available from the manufacturer or supplier.

d. Inconsistently obtaining maintenance support according to the manufacturer’s service schedule or service agreement.

e. One emergency repair or maintenance incident in the past year.

3. Unacceptable a. Cost for manufacturer or supplier service and support agreement exceeds the replacement cost.

b. Cost of maintenance exceeds the replacement cost.

c. Maintenance support and replacement parts are not available from any source.

d. Not obtaining maintenance support according to the manufacturer’s service schedule or service agreement.

e. Multiple emergency repair or maintenance incidents in the past year.

D. Productivity Cost Tolerances 1. Acceptable a. Response time or latency matches historical baseline or industry standards.

b. Based on load testing, currently operating within performance limits with capacity for additional load.

2. Marginal a. Response time or latency lags historical baseline or industry standards by less than 25%.

b. Based on load testing, currently operating within performance limits; lacks capacity for additional load.

3. Unacceptable a. Response time or latency lags historical baseline or industry standards by 25% or more.

b. Based on load testing, currently operating at maximum performance limits.

c. Occurrence of errors, timeouts, or failed requests exceeds the historical average for that asset by 20% or more.

E. Talent Depreciation Tolerances 1. Acceptable a. Written in a current programming language that is listed among the 2024 average top ten languages in the TIOBE index, which include the following: C, C++, C#, Fortran, Go, Java, JavaScript, Python, SQL, and Visual Basic.

2. Marginal a. Written in an older programming language that is still supported by an active community with current documentation.

3. Unacceptable a. Written in an obsolete programming language that is not supported by an active community, lacks current documentation, and is not listed among the 2024 average top ten languages in the TIOBE index. 12.0 Classification Tiers for Consolidated Agencies IT assets are classified based on business criticality and risk level. The classification tiers categorize IT assets based on the cost of an outage and the probability that an outage will occur.

Non-consolidated agencies may adopt this Rule 12.10 or a similar framework in order to promote consistent state-wide classification.

A. Criticality Level 1. Tier 0 - OIT Infrastructure (foundational for Tiers 1 - 4). OIT core infrastructure is the foundational infrastructure that all other tiers depend on to function. The applications in subsequent tiers cannot function without the core infrastructure in Tier 0. This includes physical data center, firewalls, core network switches/routers, ESX infrastructure, active directory, DHCP, and DNS servers.

2. Tier 1 - Applications and services that, if unavailable, risk human life. For example, law enforcement systems.

3. Tier 2 - Applications and services that, if unavailable for hours, create significant risk for the agency's performance of its designated mission. For example, Salesforce and security video footage.

4. Tier 3 - Applications and services that, if unavailable for days, create significant risk for the agency's performance of its designated mission. For example, state assistance program applications and state permitting systems.

5. Tier 4 - Applications and services that, while not intended to be down for extended periods, do not pose a significant risk to the agency's ability to perform its designated mission. For example, applications used internally like PDF viewers and SharePoint.

B. Risk Level 1. Tier 1 - In the unacceptable risk level for any tolerance boundary, representing a high 2. Tier 2 - In the marginal risk level for any tolerance boundary, representing a moderate 3. Tier 3 - In the acceptable risk level for all tolerance boundaries, representing a low 12.11 IT Lifecycle Management Plan for Consolidated Agencies A. The IT lifecycle vision for consolidated agencies is to monitor, maintain, and update IT assets within their acceptable tolerance levels and plan for scheduled and orderly replacement to decommission IT assets before they reach unacceptable tolerance levels.

B. IT assets at consolidated agencies that are outside of the acceptable tolerance boundaries may be prioritized for replacement based on criticality and risk to avoid future and further obsolescence.

C. Due to the risks they present, IT assets at consolidated agencies that operate outside of the acceptable tolerance levels may be subject to actions to mitigate the risks or reduce vulnerabilities, as determined by the OIT Chief Information Officer or delegate, until they are upgraded to the acceptable tolerance level. Actions could include but are not limited to:

1. Limited connections to other IT assets 2. Limited user accounts 3. Limited feature updates 4. Temporary or permanent freeze on changes or updates 5. Temporary or permanent suspension or discontinuation D. Affected agencies will be notified and consulted to determine risk mitigation actions, replacement needs, assessment, procurement, and scheduling.

E. Non-consolidated agencies may adopt this Rule 12.11 or develop similar IT lifecycle management plans for their respective state agencies. 12.12 Appeals and Exceptions for Consolidated Agencies A. A consolidated agency may dispute an action taken under these rules by submitting a written appeal through the agency’s IT Director to the OIT Chief Information Officer (OIT CIO). The OIT CIO or delegate shall deliver a written decision within 30 calendar days to uphold, modify, or reverse the action.

B. In exceptional circumstances, a consolidated agency may request a temporary exception to these rules if it can demonstrate that compliance would result in undue hardship or significant operational challenges. Exception requests must be submitted in writing through the agency's IT Director to the OIT CIO, and must include:

1. A detailed explanation of the circumstances necessitating the exception.

2. Evidence of the undue hardship or significant operational challenges that would arise from compliance.

3. A proposed alternative solution that addresses the risks associated with non-compliance.

4. A timeline for implementing the proposed alternative solution and achieving compliance with the rules.

C. The OIT CIO or delegate will review exception requests on a case-by-case basis and may grant exceptions if they are deemed necessary and appropriate. Granted exceptions may be temporary or subject to specific conditions or limitations, and will be reviewed periodically to ensure they remain justified and aligned with the overall goals of the rules.

D. In the event a dispute arises between a consolidated agency and OIT in relation to these rules, the OIT CIO and the Agency’s Executive Director will attempt to resolve the dispute. If the OIT CIO and the Agency’s Executive Director are unable to resolve the dispute within ten (10) business days from the date the dispute arises, then the dispute shall be referred to the Governor for final resolution. 12.13 Severability If any provision of these Colorado Information Technology Lifecycle Planning Rules, 8 CCR 1501-12, is found to be invalid by a court of competent jurisdiction, the remaining provisions of these rules shall remain in full force and effect. _________________________________________________________________________ Editor’s Notes

History New rule eff. 01/14/2025.

1501 Colorado Energy Office

8 CCR 1501-10 Regulation 1 - Community Access Enterprise Retail Delivery Fee {#sec-8-ccr-1501-10 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-10}

OFFICE OF THE GOVERNOR

REGULATION 1 - COMMUNITY ACCESS ENTERPRISE RETAIL DELIVERY FEE

8 CCR 1501-10 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 1.1 AUTHORITY AND PURPOSE 1.1.1 Authority The Community Access Enterprise Board (the “Board”) shall administer the Community Access Enterprise Fund (the “Fund”) created under § 24-38.5-303(5)(a), C.R.S. The Fund consists of: 1.1.1.1 Community access retail delivery fee revenue; 1.1.1.2 Monetary gifts, grants, donations, or other payments received by the Community Access Enterprise (the “Enterprise”);

(a) Gifts, grants, or donations from private or public sources can be accepted to benefit the establishment and operation of the Board so long as the total amount of all grants from Colorado state and local governments received in any state fiscal year is less than ten percent of the Enterprise's total annual revenue for the state fiscal year. 1.1.1.3 Any federal money that may be credited to the Fund; and 1.1.1.4 Any other money that the general assembly may appropriate or transfer to the Fund. 1.1.2 Purpose 1.1.2.1 Pursuant to § 24-38.5-303(8), C.R.S., the enterprise is authorized to implement grant, loan, or rebate programs for the following purposes:

(a) To fund the construction of electric motor vehicle charging infrastructure including but not limited to:

(I) Public, workplace, transportation network company, and multifamily electric vehicle chargers;

(II) Electric vehicle chargers for communities, including but not limited to disproportionately impacted communities;

(III) Electric vehicle chargers for medium-duty electric motor vehicles and heavy-duty electric motor vehicles, including electrified refrigerated trailers;

(IV) Infrastructure needs to support the powering of hydrogen fuel cell motor vehicles; and (V) Networks and plazas of direct current charging infrastructure that offer fast charging for electric motor vehicles;

(b) To provide inexpensive and accessible electric alternatives to motor vehicles such as electrical assisted bicycles and electric scooters;

(c) To support the adoption of electric motor vehicles in communities, including but not limited to disproportionately impacted communities, including by incentivizing replacement of high-emitting motor vehicles with electric motor vehicles; and (d) To provide incentives for transportation network companies and companies that rent motor vehicles to transportation network company drivers for use in providing transportation network company services to increase access to overnight charging capability for drivers. 1.1.3 Definitions 1.1.3.1 ‘Board’ means the governing board of the Enterprise as defined in § 24-38.5-303(2), C.R.S. 1.1.3.2 ‘Community access retail delivery fee’ or ‘retail delivery fee’ means the fee added to the price of retail deliveries by each retailer who makes a retail delivery. A retailer may elect to pay the retail delivery fee on behalf of a purchaser. 1.1.3.3 ‘Department’ means the department of revenue. 1.1.3.4 ‘Enterprise’ means the Community Access Enterprise created in § 24-38.5-303, C.R.S. 1.1.3.5 ‘Fee payer’ means any person or entity or group of persons or entities that pays the retail delivery fee on retail deliveries of tangible personal property. 1.1.3.6 ‘Fund’ means the Community Access Enterprise Fund created within the state treasury pursuant to § 24-38.5-303(5)(a), C.R.S. 1.1.3.7 “Qualified business” means a retailer that in the previous calendar year made retail sales of tangible personal property, commodities, or services in the state totaling five hundred thousand dollars or less. 1.1.3.8 ‘Retail delivery’ means a retail sale of tangible personal property by a retailer for delivery by a motor vehicle owned or operated by the retailer or any other person to the purchaser at a location in this state, which sale includes at least one item of tangible personal property that is subject to taxation. Each such retail sale is a single retail delivery regardless of the number of shipments necessary to deliver the items of tangible personal property purchased. 1.1.3.9 ‘Retail sale’ includes all sales made within the state except wholesale sales. 1.1.3.10 ‘Retailer’ means a person doing business in this state known to the trade and public as such, and selling to the user or consumer, and not for resale. The term includes a marketplace facilitator, a marketplace seller, and a multichannel seller doing business in this state. If the retailer had no retail sales in the state in the previous calendar year, then the retailer is deemed to be a “qualified business” for the current calendar year, until the first day of the month after the ninetieth day after the retailer has made sales of tangible personal property, commodities or services in the state that total more than five hundred thousand dollars. 1.1.3.11 ‘Tangible personal property’ means all goods, wares, merchandise, products and commodities, and all tangible or corporeal things and substances that are dealt in and capable of being possessed and exchanged. The term does not include newspapers or preprinted newspaper supplements that become attached to or inserted in and distributed with such newspaper as excluded in § 39-26-102(15)(a)(I), C.R.S. 1.1.4 Severability Each provision of this regulation shall be deemed severable, and in the event that any provision of this

regulation is held to be invalid, the remainder of this regulation shall continue in full force and effect.

1.2 RETAIL DELIVERY FEE

The retail delivery fee, as established by the Board, will be collected for retail deliveries of tangible personal property purchases which in the aggregate, reflect the cost of the services provided. The Board shall impose, and the department of revenue shall collect on behalf of the Enterprise, the retail delivery fee on each retail delivery. 1.2.1 The retail delivery fee shall be set at six and nine-tenths cent as authorized by § 24-38.5- 303(7)(b), C.R.S. 1.2.1.1 The retail delivery fee shall be adjusted for inflation on an annual basis starting in fiscal year 2023-24. 1.2.2 The retail delivery fee shall be collected by the department on behalf of the Enterprise beginning on July 1, 2022. 1.2.3 As of July 1, 2023, retail deliveries by qualified businesses are exempt from the retail delivery fee. 1.2.4 Each retailer who makes a retail delivery shall add to the price of the retail delivery, collect from the purchaser or may elect to pay the retail delivery fee on behalf of a purchaser, and submit payment to the department at the time and in the manner prescribed by the department in accordance with § 43-4-218(6), C.R.S.

1.3 OTHER REVENUES, PAYMENTS, GRANTS, GIFTS AND DONATIONS 1.3.1 Nothing in this rule limits or precludes the Fund from receiving other revenues, payments, grants, gifts and donations as allowed by § 24-38.5-303, C.R.S. or other statute.

2.1 STATEMENT OF BASIS AND PURPOSE 2.1.1 Jul 13, 2023

Basis and Purpose Pursuant to § 24-38.5-303, C.R.S., the Enterprise functions as a government-owned business that provides statutorily specified services to fee payers. It collects fees for a primary purpose of equitably supporting the widespread adoption of electric motor vehicles, including motor vehicles that originally were powered exclusively by internal combustion engines but have been converted into electric motor vehicles. Expenditures of Enterprise revenue may provide benefits to the public or third parties.

The Board, through development and approval of the Ten-Year Plan, will outline programs and recommendations that meet the objectives of the enterprise business purpose.

To minimize the administrative costs associated with the fee rule to further the purposes and mission of the Enterprise, the department of revenue shall collect and administer the community access retail delivery fee on behalf of the Enterprise.

Statutory Authority To fund its activities, the Board must establish fees, as authorized in § 24-38.5-303(7), C.R.S. This rule sets up the retail delivery fee that will be paid into the Fund beginning in state fiscal year 2022-23.

In 2023, the General Assembly passed Senate Bill 23-143, which created the retail delivery fee exemption for qualified businesses and permitted retailers to pay the retail delivery fee on behalf of a purchaser rather than collect payment from each retailer on each retail sale.

Other revenues, payments, grants, gifts and donations Payment into the Fund may also occur through the receipt of other revenues, payments, gifts, grants, and donations.

Future fee revisions Starting in fiscal year 2023-24, the Board, with assistance from the department, will revisit the retail delivery fee annually to adjust the fee for inflation. _________________________________________________________________________ Editor’s Notes

History New rule eff. 07/01/2022.

Entire rule eff. 11/14/2023.

8 CCR 1501-13 Regulation 1 - Building Decarbonization Enterprise {#sec-8-ccr-1501-13 omnilex-key=us-co-regs-official--department-6--8 CCR 1501-13}

OFFICE OF THE GOVERNOR

REGULATION 1 – BUILDING DECARBONIZATION FEE

8 CCR 1501-13 [Editor’s Notes follow the text of the rules at the end of this CCR Document.]

1.1 AUTHORITY AND PURPOSE 1.1.1 Authority The Building Decarbonization Enterprise Board (the “Board”) shall administer the Building Decarbonization Cash Fund (the “Fund”) pursuant to § 24-38.5-125, C.R.S.

The Fund consists of: 1.1.1.1 Building Decarbonization fee revenue; 1.1.1.2 Monetary gifts, grants, donations, or other payments received by the Building Decarbonization Enterprise; 1.1.1.3 Any money received from the issuance of revenue bonds; and 1.1.1.4 Any other money that the general assembly may appropriate or transfer to the Fund. 1.1.2 Purpose 1.1.2.1 Pursuant to § 24-38.5-125(3)(a), C.R.S., the Board is authorized to:

(a) Impose and assess a building decarbonization fee on owners of covered buildings;

(b) Provide technical assistance, financing, and other programmatic support for covered building owners' building decarbonization measures, including, but not limited to, conducting building energy audits, developing analyses to help building owners evaluate the best strategies for achieving future performance standard targets, consulting building engineers, purchasing energy use tracking software, and providing training on such software;

(c) Have and exercise all rights and powers necessary or incidental to or implied from the specific powers and duties granted under this

section; and (d) Ensure that the building decarbonization fee paid by covered building owners is used solely to support programs, technical assistance, and financial assistance for the covered building owners that pay the building decarbonization fee. 1.1.3 Definitions 1.1.3.1 ‘Board’ means the governing board of the Building Decarbonization Enterprise as defined in § 24-38.5-125(4), C.R.S. 1.1.3.2 ‘Building Decarbonization Fee’ or ‘fee’ means the fee paid by the owner of a covered building. 1.1.3.3 “Covered building” means a building comprising a gross floor area of fifty thousand square feet or more that is occupied by a single occupant or group of tenants. “Covered building” does not include:

(A) A storage facility, stand-alone parking garage, or airplane hangar that lacks heating and cooling;

(B) A building in which more than half of the gross floor area is used for manufacturing or industrial purposes;

(C) A single-family home, duplex, or triplex; or (D) An agricultural building. 1.1.3.4 ‘Enterprise’ means the Building Decarbonization Enterprise created in § 24-38.5-125(3), C.R.S. 1.1.3.5 ‘Fund’ means the Building Decarbonization Cash Fund created within the state treasury pursuant to § 24-38.5-125(6)(a), C.R.S. 1.1.3.6 “Inflation” means the annual percentage change in the in the United States department of labor's bureau of labor statistics consumer price index, or a successor index, for Denver-Aurora-Lakewood for all items paid for by urban consumers 1.1.3.7 “Office” means the Colorado Energy Office created in § 24-38.5- 101, C.R.S. 1.1.4 Severability Each provision of this regulation shall be deemed severable, and in the event that any provision of this regulation is held to be invalid, the remainder of this regulation shall continue in full force and effect.

1.2 BUILDING DECARBONIZATION FEE

The fee, as established by the Board, will be collected for the specific business purposes of providing financing and technical assistance to covered building owners to more effectively and efficiently implement building decarbonization measures, including feasibility analyses and improvements that will reduce energy use and emissions. The fee is to be collected at a rate that is reasonably related to the overall cost of the business services being provided. The Board shall impose, and the Colorado Energy Office shall collect on behalf of the Enterprise, the fee. 1.2.1 The fee shall be set at $400 as authorized by § 24-38.5-125(5), C.R.S. 1.2.1.1 The fee shall be adjusted for inflation on an annual basis starting in fiscal year 2027-2028. 1.2.2 The fee shall be collected by the Colorado Energy Office on behalf of the Enterprise annually on November 1st.

1.3 OTHER REVENUES, PAYMENTS, GRANTS, GIFTS AND DONATIONS 1.3.1 Nothing in this rule limits or precludes the Fund from receiving other revenues, payments, grants, gifts and donations as allowed by § 24-38.5-125(1)(b), C.R.S. or other statute.

2.1 STATEMENT OF BASIS AND PURPOSE 2.1.1. Basis and Purpose Pursuant to § 24-38.5-123(3) C.R.S., the Enterprise functions as a government-owned business that provides statutorily specified services to fee payers, specifically, owners of covered buildings. Expenditures of Enterprise revenue will provide benefits to fee payers, and may also benefit the public and third parties.

To minimize the administrative costs associated with the fee rule to further the purposes and mission of the Enterprise, the Colorado Energy Office shall collect the building decarbonization fee on behalf of the Enterprise. Statute mandated that the Enterprise begin collecting the fee in state fiscal year 2026 and the Board adopt rules for the

purpose of setting the amount of the building decarbonization fee in furtherance of the Enterprise's business purpose.

Statute also requires the fee be imposed upon all covered building owners; except that the fee shall not be imposed on the owner of a public building. “Public building” has the same definition as established in § 25-7-142(2)(t), C.R.S., means a covered building owned by:

(I) The state;

(II) A local government;

(III) A district or special district regulated under title 32;

(IV) A state institution of higher education;

(V) A private institution of higher education as defined in § 23-18-102(9), C.R.S.;

(VI) A school district created pursuant to article 30 of title 22; and (VII) A charter school authorized pursuant to part 1 of article 30.5 of title 22.

Statutory Authority To fund its activities, the Board must establish fees, as authorized in § 24-38.5- 125(5)(b), C.R.S. This rule sets up the permanent building decarbonization fee that will be paid into the Fund.

It is appropriate that covered building owners should pay a building decarbonization fee, as covered building owners are the direct beneficiaries of services provided by the Enterprise, which services include the financing and technical assistance provided for the building decarbonization measures.

Other revenues, payments, grants, gifts and donations Payment into the Fund may also occur through the receipt of other revenues, payments, gifts, grants, and donations.

Future fee revisions The Board, with assistance from the department of revenue, will revisit the building decarbonization enterprise fee annually to adjust the fee for inflation. ______________________________________________________________________ Editor’s Notes

History New rule emer. rule eff. 10/13/2025.

Rules 1.1.1, 1.1.2.1, 1.1.3.7, 1.2.2, 2.1.1 eff. 03/17/2026.