CCR Dept. 1508 | Code of Colorado Regulations — Department of Treasury

1508 State Treasurer

8 CCR 1508-1 Unclaimed Property {#sec-8-ccr-1508-1 omnilex-key=us-co-regs-official--department-22--8 CCR 1508-1}

DEPARTMENT OF TREASURY

UNCLAIMED PROPERTY

8 CCR 1508-1 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 1.1 Authority This regulation is adopted pursuant to the authority in section 38-13-104, C.R.S. and is intended to be consistent with the requirements of the State Administrative Procedures Act, section 24-4- 101 et seq. (the “APA”), C.R.S. and the Revised Uniform Unclaimed Property Act, sections 38-13- 101 et seq. (the “Act”), C.R.S. 1.2 Scope and Purpose A. It is the intent of the Colorado State Treasurer to enforce the unclaimed property statutes so that property presumed abandoned under those statutes is reported to and collected by the State of Colorado, and returned to its rightful owner through an efficient advertising and claims processing program. Transferring the unclaimed property and related information to the Colorado State Treasurer allows the property and information to be compiled in a single location for the convenience of the absent owner and makes it possible for the Colorado State Treasurer to better protect the interests of missing owners. The State of Colorado indemnifies the holder against claims by individuals or other states once the holder reports and delivers unclaimed property to the Colorado State Treasurer in accordance with the Revised Uniform Unclaimed Property Act.

This law shall also be observed by the Colorado State Treasurer when reporting and delivering property belonging to other states. 1.3 Applicability The passage of the Revised Uniform Unclaimed Property Act modernizes the previous act, necessitating changes to the department’s previous rules. The Amendments to existing rules and the creation of new rules relate to the handling of unclaimed property owner records, the remittance of records to the Unclaimed Property program, the oversight of third-party auditors, locator fees and other administrative functions. The amendments ensure that the rules comply with State statutes and Treasury Department operating guidelines. Amendments to the rules were adopted on October 11, 2021. 1.4 Definitions The definition of any terms used herein specific to the Unclaimed Property Program are consistent with the definitions prescribed in 38-13-102, C.R.S. in addition;

A. Division shall mean the Colorado Department of Treasury, Division of Unclaimed Property B. The Revised Uniform Unclaimed Property Act, or RUUPA in section 38-13-101 et seq., C.R.S 1.5 Rules 1.5.2 Knowledge of Owner A. A holder of unclaimed property may establish its knowledge of the existence or whereabouts of the owner of that property by recording any owner-generated activity relating to that property. The mailing of a statement, confirmation or other correspondence by a holder of unclaimed property to the last known address of the owner of that property and the nonreturn of such mail to the holder is insufficient to establish that the holder has knowledge of the existence or whereabouts of the owner. A holder may cross-reference with another account in the same institution or business that has current owner generated activity. To cross-reference a dormant or inactive account with an active account the same names must appear in some form either on the account, signature card or contract.

B. A holder may establish a code for indicating “customer contact” or “owner-generated activity” for purposes of record-keeping. That code must be well documented. 1.5.7 Indemnification A. Upon payment or delivery of property to the Administrator, the state assumes custody and responsibility for safekeeping of the property. A person who pays or delivers property in good faith is relieved of all liability to the extent of the value of the property paid or delivered for any claim with respect to the property.

B A holder who has paid or delivered property to the Administrator may make payment to a person who appears to be entitled to payment and upon filing proof of payment and proof that the payee was entitled to payment the Administrator shall promptly reimburse the holder for the payment without imposing any fee or charge.

C. If the holder pays or delivers property to the Administrator in good faith and thereafter another person claims the property from the holder or another state claims the money or property under its unclaimed property laws, the Administrator, upon written notice of claim, shall defend holder against the claim and indemnify the holder against liability on the claim. 1.5.11 Located Property A. Except as otherwise provided in the Act, agreements to pay compensation to recover or assist in the recovery of property reported under the RUUPA are unenforceable within 24 months after date of payment or delivery to the Administrator. Compensation shall not exceed 10% except as provided by the Act. 1.5.13 Electronic Reporting A. Holders shall report unclaimed property as prescribed in 38-13-401, C.R.S. in electronic format only. The format of such report shall be through the current NAUPA Standard Electronic File Format uploaded on the Division website. Holders may file their reports using the manual reporting feature on the Colorado Treasury Unclaimed Property website or file their report electronically via reporting software. The Colorado Treasury Unclaimed Property website shall provide a list of vendors known to currently provide required reporting software along with what forms of reporting that are not accepted by the Colorado Treasury Unclaimed Property Division.

B. Notwithstanding the filing of such electronic report, the Holder shall pay or deliver to the Treasurer all unclaimed property reported as required in 38-13-603, C.R.S 1.5.14 Electronic Signatures A. Any electronic signatures for unclaimed property business as the Administrator may prescribe shall be consistent with the Uniform Electronic Transactions Act, 24-71.3-101, et seq., C.R.S. 1.5.15 Power of Attorney A. A claim made pursuant to 38-13-903, C.R.S. by a person with a duly authorized Power of Attorney on behalf of the original owner may be processed as required by law at the Administrator’s discretion. If claim by a Power of Attorney is initiated, such action does not preclude the Administrator from seeking verification from the original owner. 1.5.16 Aggregate Reporting A. Aggregate reporting under 38-13-402(j)(2), C.R.S. shall consist of like properties each of which has an individual value of less than $25. The holder shall maintain a record of the itemized information for ten (10) years. 1.5.17 Continuity of Records A. When a holder acquires unclaimed property from another holder, such as in a merger, acquisition, reorganization, consolidation or transfer, the successor holder shall have a duty to maintain and continue the records of the prior holder concerning unclaimed property, as prescribed in 38-13-404, C.R.S. 1.5.18 Remittance and Custody of Securities A. For payment or delivery of property as identified in 38-13-603(8), C.R.S. a holder is not required to deliver to the Administrator a security statutorily defined as nonfreely transferable. This includes securities that may be under global lock, restricted, worthless or nonfreely transferable for any reason.

B. For unclaimed property as identified in 38-13-402, C.R.S, the report made by the Holder as prescribed in 38-13-401 C.R.S. for such property must match the dollar value of the property as transferred to the Administrator under 38-13-603, C.R.S. CUSIP changes, stock splits, etc. must be fully expressed on holder reports. For example, holders should not report 100 shares of stock A and then deliver 75 shares of stock B or 33 shares of stock A.

C. The Administrator may decline to take custody of property pursuant to 38-13-607, C.R.S. if:

The property has a value less than the estimated expenses of notice and sale of the property; or 2. Taking custody of the property would be unlawful. 1.5.19 Nature of Unclaimed Property A. A holder must report under 38-13-402, C.R.S. the original nature of the property being reported, if known, and shall be reported according to the timeline specified for the original nature of the item.

For example, if the underlying transaction is an unclaimed wage but the financial instrument is a cashier’s check, the reportable item is the wage, and not the cashier’s check.

B. The report required under section 38-13-402, C.R.S. must include the name, last known address and social security number or tax payer identification of the apparent owner or property with a value of twenty-five dollars or more. 1.6.1 Reporting Deadlines and Extensions A. Unclaimed property reports, as identified in 38-13-403, C.R.S. must be filed before November 1 of each year with the exception of Insurance Companies as defined in 38-13-102, C.R.S., for which the report must be filed before May 1 of each year.

B. Under 38-13-403(3), C.R.S., the Administrator may grant an extension in the form of 30 days for holders that are unable to submit their report before the deadline. Extension requests must be submitted for review to the Administrator at least 30 days prior to the original filing due date. 1.6.2 Local Government Agency Opt-Out Option For local government unclaimed property exemption as identified in 38-13-1504, C.R.S., local government agencies that choose to opt-out from delivering unclaimed property to the State Treasurer must complete and submit an official opt-out form provided by the Division. This must be accepted by the division in advance of the local government annual report submission. 1.6.3 Notary of Claims A. The administrator shall require notarization for claims submitted by a person if the claim is equal to or greater than $1000. This includes securities and tangible properties. 1.6.4 Audit Examination Estimation The Administrator may examine the records of a holder to determine compliance with the Act under 38-13-1002, CRS or the Administrator may contract with a third-party to conduct examinations under 38-13-1009, C.R.S.

A. Pursuant to 38-13-1006, C.R.S., if a Person subject to examination does not retain the records required by Section 38-13-401, C.R.S., the Administrator may determine the value of property due using a reasonable method of estimation based on all information available to the Administrator, including extrapolation and use of statistical sampling when appropriate and necessary.

B. A payment not made in a timely manner based on estimation is considered a penalty as prescribed in 38-13-1204, C.R.S. A holder required to file shall retain records for ten years after the later of the date the report was filed or the last date a timely report was due to be filed.

Estimation does not relieve a Person from an obligation to report and deliver property to a State in which the holder is domiciled.

C. Unless agreed to by a Person subject to examination, estimation should be used only when there are insufficient records to perform an examination.

D. An Auditor may not use estimation in an examination unless either:

Person subject to examination agrees in writing to the use of estimation as part of an audit resolution agreement; or, 2. Administrator approves in writing the use of estimation in the examination.

E. Prior to approving the use of estimation in an examination under the Act the Administrator shall:

Pursuant to 38-13-1003, notify the Person subject to examination in writing that the Administrator is considering the use of estimation because of a failure to maintain the records required by 38-13-404, C.R.S of the Act;
After considering any evidence submitted by the Auditor and the Person subject to examination, make a written determination that the Person subject to examination has failed to maintain the records required by Section 38-13-104, of the Act;
Provide an opportunity for the Person subject to examination to submit written objections including, but not limited to:

a. submitting evidence that the Person subject to examination has maintained sufficient records to perform the examination for some or all of the years during the time period covered by the examination; or b. proposing an estimation methodology;

F. Notify in writing the Person subject to examination of the estimation methodology to be used and for which years during the time period covered by the examination estimation will be used. 1.6.5 Third Party Audit Contracts A. Subject to the requirements of 38-13-1009, C.R.S., the Administrator may contract with a Person (hereinafter, “Auditor”) to conduct unclaimed property examinations to determine compliance with the Act. Auditor is defined as the Administrator’s agent in 38-13-202, C.R.S.

A contract to conduct an examination may provide for compensation of the Auditor based on a fixed fee, hourly fee, or contingent fee.
A contract with an Auditor to conduct an examination is a public record under the Colorado Open Records Act.
An Auditor and the Auditor’s staff shall collectively possess sufficient training and experience to adequately perform unclaimed property examinations.
An Auditor shall not engage in any unclaimed property examination to determine compliance with the Act without written authorization from the Administrator.
An Auditor shall maintain independence in performing the examination and avoid conflicts of interest.
An Auditor shall report in writing to the Administrator at least monthly on the status of all unclaimed property examinations which the Auditor has been authorized to perform by the Administrator. 1.6.6 Notice of Third Party Audit Examination A. All third party audit unclaimed property examinations should begin with an official notice of examination letter.
A notice letter will:

a. Notify the Person subject to examination that its books and records (including those belonging to subsidiary and related entities or maintained by a third party that has contracted with such Person) are subject to examination;

b. Identify the assigned Auditor; and, c. Include Auditor contact information.

B. A notice letter may either be sent 1. Directly to the Person subject to examination by the Administrator or;

to the Auditor assigned to the examination for delivery to the Person subject to 1.6.7 Third Party Audit Examination Entrance Conference A. Once an examination is assigned and written notice of an examination is provided to the Person subject to examination, the Auditor and/or Examiner should schedule an entrance conference to include representatives of the Person subject to examination. A representative of the Administrator may, but is not required to, participate in an entrance conference.

B. During the opening conference, by way of example and not limitation, the Auditor shall:

Identify to the extent possible the types of property that will be subject to the examination and the time period covered by the examination;
Discuss an examination work plan, a tentative schedule, and any potential issues related to scope;
Provide contact information for both the Auditor and the Administrator;
Provide the Person subject to examination a draft confidentiality agreement, if a draft has not been presented prior to the opening conference;
Notify the Person subject to examination of their ability to request an informal conference with the Administrator pursuant to the Act;
Advise the Person subject to examination that the Administrator and not the Auditor makes determinations concerning such Person’s liability under the Act and that interpretations of the Act are made by the Administrator;
Request records and materials necessary to proceed with the next steps of the examination;
Explain the requirement to provide a due diligence notice to the apparent owner of property presumed abandoned. Due diligence requirements are described in 38-113-501 and 38-113-502, C.R.S.; and, 9. Explain that, unless otherwise agreed to in writing by the Administrator, the Person subject to examination shall remit to the Auditor any unclaimed property identified during the examination that is owed to the state. 1.6.8 Third Party Audit Examinations Advocates A. A Person subject to examination may retain third-party Advocates (an "Advocate") to assist them in the examination process.

B. The retention of an Advocate is no basis to delay the commencement of the examination and the Administrator will not delay the examination so that the Advocate may conduct a review or its own audit of the books and records of the Person subject to examination in advance of the Administrator’s examination.

C. The Administrator should cooperate with the Person subject to examination and its Advocate and keep both of them apprised of records requests, interviews, and the progress of the audit in general. 1.6.9 Third Party Audit Examination Guidelines A. The Auditor and the Person subject to examination shall act in good faith to conduct the examination under the terms and within the time frame established in the entrance conference.

During the examination, the Auditor may make subsequent requests to the Person subject to examination for additional books and records as needed to complete the a. The Auditor shall submit record requests to the Person subject to examination in writing, or if the request is made verbally, shall follow up with written documentation of the request.

b. Record requests shall have reasonable deadlines in order to move the examination forward and avoid unnecessary delays. The Person subject to examination is responsible for advising the Auditor in advance of any anticipated difficulties in achieving deadlines and agreed upon deliverables.

c. The Auditor shall provide a reasonable timeframe for the Person subject to examination to respond to the request based on the type and extent of the information requested and other relevant facts and circumstances.

d. The Auditor shall provide confirmation of receipt to submissions received from the Person subject to examination, with reasonable projected response times.

The examination shall not be limited to a review of work papers, compilations, or record summaries prepared by the Person subject to examination or an Advocate but shall include, but not be limited to, access to the original books and records deemed by the Administrator to be necessary to ascertain compliance with the Act. The Third-Party Auditor may utilize data sources in their examination, for example the Social Security Administration’s Death Master File (DMF), the United States Post Office National Change of Address database (NCOA), etc.
The Auditor shall properly document the examination and make the working papers gathered during the unclaimed property examination available for review by the Administrator. Such working papers will include planning information and all related calculations, statistical analyses, and summarizations. 1.6.10 Confidentiality of Records Obtained or Compiled During the Third Party Audit Examination A. Records obtained and records, including work papers, compiled by the Administrator or the Administrator’s agent in the course of conducting an examination are subject to the confidentiality and security provisions of the Act and are not public records. 1.6.11 Confidentiality Agreement- Third Party Audit Examination A. The person subject to examination may require, as a condition of disclosure of the records of the Person to be examined, that each person having access to the records disclosed in an examination execute and deliver to the Person to be examined a confidentiality agreement that:
is in a form that is satisfactory to the Administrator; and 2. requires the Person having access to the records to comply with the provisions of Part 14 of the Act.

B. If the Person subject to examination and the Auditor are unable to enter into a confidentiality agreement within 60 calendar days from the date an agreement reasonably satisfactory to the Administrator was first presented to the Person subject to the examination by the Auditor or the Administrator, then the examination may commence without a confidentiality agreement in place and the parties shall rely on the confidentiality provisions of Part 14 of the Act.

C. Auditors shall not disclose confidential information obtained during an unclaimed property examination to any Person other than to the Administrator or the Administrator’s designee and, in the case of a multistate examination, to authorized representatives of a state participating in the D. Auditors shall not use confidential information obtained from the person subject to an examination for any purpose other than for purposes of the examination. Auditors shall take reasonable steps to ensure that the confidential information provided by the Person subject to an examination is securely maintained. 1.6.12 Third Party Audit Examination Bankruptcy A. If at any time before or during the course of an examination the Person subject to examination files for bankruptcy, such Person shall give notice of the filing to the Auditor. The Auditor shall, within ten calendar days of receiving notice or the discovery of the event, notify the Administrator of the bankruptcy filing. If the Administrator so elects, the Auditor shall assist the Administrator to ensure that a proper proof of claim is filed timely in the bankruptcy action. 1.6.13 Third Party Audit Examination Audit Resolution Agreements A. Pursuant to the Administrator’s authority to conduct an examination, the Administrator possesses the authority to resolve an examination via negotiation and settlement with the Person subject to examination. This provides flexibility to both the Person subject to examination and the Administrator to resolve issues that could require formal appeal or litigation. Such settlements are often referred to as “audit resolution agreements.”

B. The Administrator may agree to reduce or waive interest and penalties as part of a settlement, to the extent permitted by law.

C. A mutually-agreed upon settlement resolves a specific examination and does not create any precedent on specific legal issues. 1.6.14 Third Party Audit Examination Report to Holder A. At the conclusion of an examination, unless waived in writing by the Person being examined, the Administrator shall provide to the Person whose records were examined a report that specifies:

the work performed;
the property types reviewed;
the methodology of any estimation technique, extrapolation, or statistical sampling used in conducting the examination;
each calculation showing the value of property determined to be due; and, 5. the findings of the Auditor conducting the examination. 1.6.15 Multistate Third Party Audit Examinations A. The Administrator may agree to participate in an examination of a Person for compliance with unclaimed property laws of multiple states, including the Act, where a single Third-Party Auditor performs an examination for more than one state.

B. Multistate examinations are intended to be more efficient and effective for both the Person being examined and the states which have authorized the examination. _________________________________________________________________________ Editor’s Notes

History Entire rule eff. 11/30/2021.

8 CCR 1508-2 State Public Finance Policy {#sec-8-ccr-1508-2 omnilex-key=us-co-regs-official--department-22--8 CCR 1508-2}

DEPARTMENT OF TREASURY

State Treasurer STATE PUBLIC FINANCE POLICY 8 CCR 1508-2 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 1.1 Authority This regulation is adopted pursuant to the authority in section 24-36-121, C.R.S. and is intended to be consistent with the requirements of the State Administrative Procedure Act, section 24-4-101 et seq ., C.R.S. (the "APA"). 1.2 Statement of Purpose Senate Bill 12-150, codified in part at section 24-36-121, C.R.S., authorizes the State Treasurer to promulgate by rule, a state public financing policy and to act as the centralized issuing manager for certain Financial Obligations of the State of Colorado. The role of issuing manager includes the following:

Managing the issuance or incurrence of a Financial Obligation, and - Post-issuance compliance with federal and state tax and securities laws.

The State Treasurer may delegate his or her authority under this regulation to the Deputy State Treasurer or other staff of the State Treasurer’s office. 1.3 Applicability The provisions of this regulation shall be applicable to Financial Obligations issued or incurred by the State and State Agencies defined in section 24-36-121(3)(c)(I), C.R.S.

The provisions of this regulation do not apply to entities excluded from the definition of State Agency in

section 24-36-121(3)(c)(II), C.R.S.

For the purposes of the Department of Transportation, the provisions in this regulation applicable to Financial Obligations do not include those defined in section 24-36-121(3)(a)(II), C.R.S.

The provisions of this regulation do not apply to any issuance or incurrence that is not a Financial Obligation or to any issuance or incurrence that is not payable from and does not pledge State Revenues.

The provisions of this regulation do not authorize the State Treasurer to supersede a State Agency’s

authority to enter into or incur a Financial Obligation, nor does it affect other state laws regarding the General Assembly’s approval of any capital lease or lease purchase agreement over five hundred thousand dollars pursuant to sections 24-82-801 and 24-82-802, C.R.S.

The provisions of this regulation do not authorize the State Treasurer or any other public agency to waive an election otherwise required under the State Constitution or to hold an election inconsistent with the requirements of the State Constitution. References to Financial Obligation in this regulation are for reference only and shall not be construed to create debt or a multiple fiscal year financial obligation contrary to the State Constitution. 1.4 Definitions The definition of the terms used herein specific to the State Public Financing Policy are consistent with the definitions in section 24-36-121, C.R.S.

"CAFR" means the State Comprehensive Annual Financial Report.

"COPs" means certificates of participation.

"EMMA" means the Electronic Municipal Market Access system, the market and continuing disclosure filing portal for the MSRB.

"Financial Obligation" means the definition of Financial Obligation in section 24-36- 121(3)(a)(I), C.R.S.

"Financial Professionals" means bond counsel, disclosure counsel, financial advisors, and other professionals retained by the State Treasurer to assist the State in the issuance or incurrence of Financial Obligations.

"Internal Revenue Code" means the definition of Internal Revenue Code in section 24- 36- 121(3)(b), C.R.S.

"MSRB" means the Municipal Securities Rulemaking Board.

"SEC" means the U.S. Securities and Exchange Commission.

“State” means the State of Colorado.

"State Agency" means the definition of State Agency in section 24-36-121(3)(c)(I), C.R.S.

"State Institution of Higher Education" means the definition of State Institution of Higher Education in section 24-36-121(3)(d), C.R.S.

"State Revenues" means the definition of State Revenues in section 24-36-121(3)(e), C.R.S. 1.5 Legal and Regulatory Requirements The State Treasurer and the Office of the Attorney General shall coordinate their activities to ensure that the Attorney General has all the documents and information available to deliver an opinion on behalf of the State that a Financial Obligation issued or incurred by the State complies with applicable state laws.

All Financial Obligations issued or incurred shall comply with the applicable covenants in the documents governing the issuance or incurrence of the Financial Obligation.

Unless otherwise authorized in statute, all Financial Obligations are binding contracts of the State that are not valid until signed by the State Controller or his or her designee. All relevant documents to be executed and delivered by the State in respect of Financial Obligations shall be provided to the State Controller for review as they are prepared or identified in connection with the issuance or incurrence of any Financial Obligation. 1.6 Planning and Criteria of Issuance or Incurrence of Financial Obligations A. Minimum Required Approval Information. Section 24-36-121, C.R.S. states that "Senate Bill 12-150, enacted in 2012, is not intended to grant the State Treasurer any authority that supersedes a State Agency’s authority to enter into or incur a Financial Obligation, nor is Senate Bill 12-150 intended to affect other state laws regarding the General Assembly’s approval of any capital lease or lease purchase agreement over five hundred thousand dollars." With that in mind, in order to initiate the management process, the State Treasurer requires that the following minimum information be submitted in writing:

A brief description of the proposed financing, including source of repayment for the Financial Obligation;
Evidence of statutory authority, or legislation that authorizes the Financial Obligation; and 3. Timeline of project and proposed financing.

B. Additional Information Requirements. The State Agency will provide the State Treasurer with any additional information that the State Treasurer considers necessary or appropriate to act as the issuing manager for the issuance or incurrence of the Financial Obligation. This may include but is not limited to the following:

Assumptions of underlying cash flow projections associated with the repayment of the Financial Obligation;
Information to be delivered by the State Treasurer to credit ratings agencies, underwriters and other participants related to the security of the transaction;
Description of the State Agency, program, staff and operations that impact the issuance or incurrence of the Financial Obligation;
As applicable, details about the property proposed to be used as the leased property under any lease purchase agreement;
Information regarding the structure of and security for the proposed Financial Obligation; and 6. Evidence of approval from the Office of State Planning and Budget that any fiscal impact from the Financial Obligation or refinancing is understood and can be incorporated into long term financial planning.

C. Timeline Considerations. Each State Agency that anticipates issuing or incurring a Financial Obligation shall provide written notice to the State Treasurer no less than sixty (60) days prior to the date on which a State Agency anticipates issuing or incurring a Financial Obligation, for a new transaction, and no less than thirty (30) days prior to the date on which a State Agency anticipates issuing or incurring a Financial Obligation for a refinancing transaction. While this is the minimum requirement defined by statute, State Agencies should consult with the State Treasurer to consider the following factors that may affect the time frame needed to accomplish issuing or incurring a Financial Obligation:

Transaction size;
Complexity of the transaction;
Type and structure of proposed Financial Obligation; and 4. Market conditions.

D. General Limitations of Issuance or Incurrence. The issuance or incurrence of all Financial Obligations are subject to the following general limitations:

Financial Obligations shall comply with all applicable laws, regulations, and covenants and, if applicable, shall not jeopardize the federal or state tax-exempt (or other federal or state tax) status of outstanding Financial Obligations;
Financial Obligations shall not be issued or incurred to fund operations, except for short term tax anticipation notes issued by the State Treasurer pursuant to sections 29-15-112, 22- 54-110 and 24-75-901, C.R.S.;
Capital improvements may be financed, but the plans for such projects should first be developed and approved in accordance with any state statute applicable to the projects;
Principal and interest payment schedules should generally be structured to result in level annual payments due on a Financial Obligation, but may vary when circumstances warrant;
Financial Obligations issued or incurred will generally be limited to fixed rate current interest serial or term maturities, but may be sold in the form of variable rate, capital appreciation or other structures, including short term securities if circumstances warrant; and 6. The average life of the issued or incurred Financial Obligation should generally be no greater than the projected average useful life of the asset(s) being financed. 1.7 Selection of Outside Professional Services A. Finance Professionals.
Financial Advisors . The State Treasurer may retain a financial advisor to assist in the issuance or incurrence of the proposed Financial Obligation, and the administration and post-issuance compliance of Financial Obligations. Financial advisors retained by the State Treasurer shall also comply with all applicable rules and regulations promulgated by the SEC and MSRB. A financial advisor may not serve as an underwriter on the same issuance or incurrence during the term of its engagement. Assistance to be provided by a financial advisor may include, but not be limited to:

(a) Analyze the costs and benefits of various funding sources, including the strengths and weaknesses of various financing alternatives or if requested, propose or develop a plan of financing;

(b) Analyze and report on the advantages and disadvantages of each proposed plan of financing and method of sale;

(c) Provide advice regarding the potential pricing of the Financial Obligation, and provide estimated repayment schedules of a proposed Financial Obligation;

(d) Monitor market opportunities, as well as favorable conditions for any refinancing opportunities of existing Financial Obligations;

(e) Work with the State Treasurer in recommending size, structure and specific terms and conditions of a Financial Obligation;

(f) Provide advice on the structuring, method and conditions of sale, including publicly offered and privately negotiated options;

(g) Provide advice on terms and conditions of credit and liquidity facilities, interest rate exchange agreements and other derivative products;

(h) Assist in preparing documents necessary for the issuance or incurrence of Financial Obligations, which may include schedules, sale notices, operative documents, closing memoranda and disclosure materials;

(i) Assist in the application for ratings and credit and/or liquidity facilities;

(j) Upon request, provide advice on investment of proceeds;

(k) Assist in the determination of the financing team, including development of requests for proposals for other professional services and the evaluation of responses; and (l) Provide a written post-transaction assessment, including post-issuance compliance assessment, if requested by the State Treasurer.

Bond Counsel, Disclosure Counsel and other legal representation. The State Treasurer may retain bond counsel, disclosure counsel, tax counsel, or other legal counsel necessary for the issuance or incurrence of a Financial Obligation. If legal counsel will be retained by the State Treasurer to represent the State, any legal counsel must be authorized by the Office of the Attorney General and receive a designation as a Special Assistant Attorney General. Any legal counsel retained by the State Treasurer must be listed in the most recent The Bond Buyer’s Municipal Marketplace ®, a periodic directory known as the "Red Book" and must have extensive experience in government and public finance, municipal securities regulation and tax issues.
Other Professionals . The State Treasurer may retain other professionals to assist with the Financial Obligation issuance or incurrence process if the State Treasurer determines that such retention is necessary and in the best interests of the State. Such professionals may include, but not be limited to: trustees, registrars, paying agents, escrow agents, accountants, financial printers, underwriters, tender/remarketing agents, credit and liquidity facility providers, and other professional services associated with financings.

B. Selection Process. The selection and retention of finance professionals will be achieved through an open and competitive request for proposal process. The State Treasurer is exempt from the State procurement code pursuant to sections 24-2-102(4) and 24-101-301(1), C.R.S., and may, but is not required to, post requests for proposals through the State procurement bid system or on the State Treasurer’s website.

C. Criteria for Evaluating Selection of Financing Team Members. The criteria to be used in evaluating and selecting a finance professional may include, but is not limited to:

The firm’s experience and capability and the individual finance professional’s experience and capability to provide the requested services to major governmental issuers, including the State;
Experience and capability of assigned personnel and their familiarity with the State;
Fees and expenses;
Absence of conflicts of interest;
Availability of key personnel to serve the State;
References;
Knowledge of innovative approaches;
Demonstrated ability to meet deadlines and attention to detail;
Local office and Statewide presence;
Financial strength or capability to execute the proposed transaction; and 11. Limitations and qualifications in legal opinions.

The State Treasurer shall determine the weight given each evaluation criteria. 1.8 Types and Structural Features of Financial Obligations A. Type of Financial Obligation.

General Obligation ("GO") Bonds. GO bonds are backed by the "full faith and credit" of the issuing entity. GO bonds may only be issued by the State upon satisfaction of all requirements of the State Constitution, including voter approval. Currently, the State has no outstanding GO debt.
Lease Purchase Agreements without or with COPs (a) Lease purchase agreements may be used to finance a wide variety of capital assets, including office buildings, prisons and equipment, such as motor vehicles and computer systems. The State may enter into a lease purchase agreement, as lessee, in two main forms: (1) a "stand alone" lease under which an asset owner or a single private placement investor funds the assets constituting the leased property under the lease purchase agreement and (2) a lease where the lease base rental payments due from the State are certificated into participation interests described as "Certificates of Participation" or COPs. The lease purchase agreements may be renewed from one fiscal year to the next fiscal year by the State, as lessee, by the act of appropriation of the base rental payments due under the lease purchase agreement. The lease purchase agreements are not a debt or multiple fiscal year financial obligation of the State.

(b) Before proceeding to obtain any necessary legislative approval pursuant to sections 24-82-801 and 24-82-802, C.R.S., or any other statute or proceeding with a lease purchase agreement/COPs financing, the Office of the Attorney General must be consulted regarding appropriate legal structuring matters, including the property proposed to constitute the leased property and base rental payment structures.

Revenue Bonds . There are various types of revenue bonds depending upon the source of revenue from which the bonds are to be paid. One type is used to finance assets which produce revenue to repay the financial obligation issued or incurred (toll road bonds, for example). Another type is payable from a specific revenue source but is not used to finance revenue-producing assets (the CDOT TRANs or higher education revenue bonds paid from student fees, for example). Revenue bonds may be issued by the State or a State Agency upon satisfaction of all requirements of the State Constitution.
General Tax Revenue Anticipation Notes ("GTRANS") and Education Tax Revenue Anticipation Notes ("ETRANS"). Pursuant to sections 24-75-901, 29-15-112 and 22-54- 110, C.R.S., the State Treasurer is authorized to sell notes payable from anticipated revenues to fund cash flow shortfalls of the State and certain school districts. The State Treasurer will enter into Financial Obligations for the GTRANS or ETRANS programs when market conditions warrant, and upon demonstration of short term cash flow deficits that can be repaid from anticipated tax revenues.

B. Financial Obligation Features.

Variable Rate Demand Obligations ("VRDO") . Interest rate savings can generally be achieved along the shorter end of the yield curve and provide benefits in structuring the State’s portfolio of Financial Obligations. VRDOs are easier to refund than fixed rate obligation, as these obligations are redeemable at their outstanding principal amount on any date with applicable notice as detailed in the documents. Prior to structuring a financing with variable rate obligations, the State Treasurer will assess, among other factors:

(a) Financial flexibility;

(b) Liquidity provider/third party risk;

(d) Interest rate risk; and (e) Market conditions.

Capitalized Interest . Interest may be capitalized as warranted by market conditions and limitations on the repayment schedule of the Financial Obligation.
Optional Redemptions. Generally, Financial Obligations issued or incurred by the State or a State Agency may contain optional redemption features unless the State Treasurer determines there are sufficient benefits to a non-callable structure. With regard to redemption features, the State Treasurer will ultimately determine what is in the State’s best interest in selecting appropriate dates and prices, taking into account such items as the costs of funds versus future financial flexibility.
Capital Appreciation Obligations . Capital appreciation obligations shall only be used if the State Treasurer determines it to be in the State’s financial interest considering current investor demand, future cash flows and expected interest rates.
Liquidity and Credit Facilities . When judged prudent and advantageous to the State, and as permitted by State statute, the State Treasurer may authorize agreements with municipal bond insurance companies, commercial banks or other financial entities for the purposes of acquiring letters of credit or insurance policies in respect of the Financial Obligations, based upon the following considerations:

(a) The net present value of the estimated annual repayment savings from the use of credit enhancement should be greater than the fees and/or premium paid by the State to obtain such credit support.

(b) A competitive process may be used to select credit enhancement providers.

Interest Rate Exchange Agreements . The State Treasurer will determine when it may be advisable and in the State’s best interest for a State Agency to enter into an interest rate exchange agreement pursuant to article 59.3 of title 11, C.R.S.
Reserves . When determined economically beneficial by the State Treasurer, the State may obtain a surety policy, letter of credit, line of credit, or similar arrangement in lieu of cash funded reserves to enhance the security for the Financial Obligations.
Moral Obligations . The State Treasurer, in consultation with the agencies and departments of the State required to authorize a moral obligation covenant of the State, will determine under what circumstances, if any, it is appropriate for the State to enter into a moral obligation covenant of the State in connection with a Financial Obligation. Under a moral obligation covenant, the State’s obligation to honor the covenant is moral, rather than legal. Entering into a moral obligation covenant may be appropriate when necessary to protect the State’s credit rating or preserve assets necessary for the functioning of state government. Prior to entering into any moral obligation covenant, the State Treasurer will consult with the Office of the Attorney General regarding legal requirements and ramifications of a moral obligation covenant, and may consult with a financial advisor to fully understand the rating implications of such a covenant.
Other Features of Financial Obligations . The State Treasurer may decide to issue or incur Financial Obligations that are authorized by state legislation when the State Treasurer determines that it is in the State’s best interest to do so. Examples of such Financial Obligations are those authorized by stimulus legislation similar to Build America Bonds and Qualified School Construction Bonds.
Intercept Credit Enhancement . Upon satisfaction of state law requirements, the State Treasurer may use its authority to intercept State payments to Institutions of Higher Education, qualified charter school and school districts in order to enhance the credit of a Financial Obligation of an Institution of Higher Education pursuant to section 23-5-139, C.R.S.; a school district pursuant to section 22-41-110, C.R.S.; or a qualified charter school pursuant to section 22-30.5-406, C.R.S.

C. Derivative Products , The State Treasurer may determine to use derivative products to reduce the State’s exposure to changing market conditions or to reduce interest rate risk, but shall not be used for speculative purposes.

D. Refundings and Early Redemptions. If determined to be in the State’s financial interest, the State Treasurer will consider prepaying or defeasing outstanding Financial Obligations when resources are available to reduce the amount of Financial Obligations outstanding. The State Treasurer will consider refunding Financial Obligations in order to generate interest savings, restructure payment schedules and/or eliminate burdensome covenants. The State Treasurer will evaluate and may consider the following factors, among others, in analyzing, reviewing and proceeding with a refinancing opportunity on behalf of State Agencies:

(1) Net present value savings;

(2) Absolute dollar savings;

(3) Size of issue;

(4) Market conditions; and (5) Number of years remaining on outstanding Financial Obligations.

E. Energy Performance Contract ("EPC") and Capital Lease Approval Process. State Agencies may initiate energy performance contracts to improve the energy efficiency of state buildings or facilities pursuant to sections 24-30-2001 to 24-30-2003, C.R.S. or 24-38.5-106, C.R.S. The Colorado Energy Office ("CEO") and the Office of the State Architect ("OSA") work with public entities and energy service companies ("ESCO"s) to provide program standard contract documents, processes and procedures as well as guidance, support, and due diligence services related to the Technical Energy Audit ("TEA") contract and report of the Energy Performance Contracts ("EPC"s). For state agency projects, the State Treasurer will work with the CEO and Department of Personnel and Administration (Offices of the State Controller and the OSA) to integrate the EPC and financing components including, but not limited to the following:

(1) Integrate financing process, procedures, and milestones into the State Agency’s EPC documents;

(2) Determine the process in which the CEO, ESCO, and State Agency will notify the State Treasurer of a capital lease related to an EPC; and (3) Work with the Attorney General’s office to ensure a standardized contract for: (a) TEAs, (b)

EPCs and (c) capital leases related to EPC capital improvements for State Agencies to utilize. 1.9 Methods of Sale It is in the State’s best interest to sell its Financial Obligations using the method of sale that is expected to achieve the best sales results, taking into account both short-range and long-range implications. In order to ensure that the State’s best interests are being met, it is important for the State Treasurer to be actively involved in any method of sale.

A. Factors for Determining Method of Sale.

(1) Considerations which support a competitive sale process include, but are not limited to the following: the Financial Obligation has an unenhanced credit rating favorable to the market; the Financial Obligation is appropriately sized to attract investors without a concerted effort; and interest rates and other economic factors are stable and market demand is strong.

(2) Considerations which support a negotiated sale process include, but are not limited to the following: the Financial Obligation is not large enough to attract market interest; market timing will be a critical factor in garnering the lowest possible interest rate; the financing requires a complex or innovative structure; the market has concerns about the credit quality of the Financial Obligation; and the market is unfamiliar with the project, the structure of the financing or the revenues pledged for annual repayment.

B. Initiating a Competitive Sale. The Official Notice of Sale (the "Notice") will be published in the most appropriate method of advertisement, such as MSRB’s EMMA website. The Notice will announce the State’s intent to sell Financial Obligations and will contain references to relevant security and structural information that interested bidders may require. The Notice will clearly indicate the permissible discounts, premiums and basis of award, including additional requirements to acknowledge MSRB and SEC compliance.

C. Parameters for Underwriter Selection for a Negotiated Sale. When the State Treasurer determines that a negotiated sale is in the best interests of the State, the State Treasurer may retain underwriters to execute the sale of Financial Obligations.

(1) Co-Managers and Selling Groups. If underwriter co-managers and/or a selling group are deemed appropriate to the sale of Financial Obligations, those underwriters will be engaged by the State Treasurer. Underwriters will be selected by an open and competitive bidding process.

(2) Pricing and Allocation of Sales.

(a) The negotiation of terms and conditions will include, but not be limited to: prices, interest rates, underwriting or remarketing fees and commissions, based on prevailing terms and conditions in the marketplace for comparable issuers, lessees and obligors and similarly secured and rated Financial Obligations in addition to the State’s recent experience.

(b) If more than one underwriter is included in the sale of the Financial Obligation, the State Treasurer will establish the general guidelines of the allocation of fees, liability and underwriting in a manner consistent with the objectives of the State.

(c) Criteria to be used in determining the allocation of Financial Obligations sold by selected underwriters will include, but not be limited to:

(i) Demonstrated performance in the sale of previous issues of financial obligations;

(ii) Demonstrated commitment to the overall goals of the State’s financing programs.

(3) Underwriter’s Responsibilities for a Negotiated Sale. Contemporaneous with the execution of a purchase contract for Financial Obligations, the senior manager of a financing will:

(a) Provide for the fair allocation of Financial Obligations to underwriters and selling group members, consistent with the previously negotiated terms and conditions of allocation, as referenced in any related agreement among underwriters;

(b) Provide affirmation of compliance with all current MSRB regulations; and (c) Agree to submit to the State a complete and timely account of all orders, allocations and underwriting activities related to the sale of Financial Obligations under its management.

D. Parameters and Criteria for a Private Placement. As part of the sale process, the State Treasurer may determine it is in the State’s best interest to authorize a private placement of the Financial Obligation, based upon the following considerations: Size of issuance; limited and simple project scope and collateral; little market interest in small dollar amount of financing; interest rate; covenants; non-market redemption provisions; and savings associated with normal closing transaction fees for financial professionals.

In a private placement, the State Treasurer will prepare and distribute a request for proposals from financing companies and financial institutions and select the bid most advantageous to the State. 1.10 Credit Ratings Unless otherwise justified, the State Treasurer will seek a rating on all new Financial Obligations which are being sold in the public market if determined to be necessary. The State Treasurer recognizes the importance of maintaining good relations and full transparency with credit rating agencies in order to increase the acceptance of the Financial Obligations in the financial markets, which impacts interest costs associated with the Financial Obligations. However, exceptions to this requirement are permissible, such as when privately placing a security with an accredited investor, if warranted by the circumstances.

A. The State will obtain an underlying rating on Financial Obligations that are credit enhanced, when beneficial to the State.

B. The State will attempt to maintain a rating on those credits that have previously been rated by one or more of the rating agencies, when in the best interest of the State.

C. As requested, the State Treasurer will provide financial information including the State’s CAFR, budget and forecast data, or other requested information to agencies which provide credit ratings or credit facilities or liquidity facilities for the State’s outstanding Financial Obligations. 1.11 Arbitrage Compliance The State Treasurer shall comply with the applicable arbitrage regulations mandated by the Internal Revenue Code, including but not limited to, regulations regarding timely filings. For State Financial Obligations, the State Treasurer is responsible for the following:

A. The direction of investments related to proceeds of the issuance or incurrence of Financial Obligations will be undertaken by the State Treasurer in accordance with applicable State law and, if applicable, the State Treasurer’s Investment Policy.

B. The State Treasurer shall maintain separate accounts by source of funds and record pro rata interest income of any commingled funds used to invest the proceeds of Financial Obligations, on a monthly basis.

C. Balances in project accounts shall be monitored by the State Treasurer to document the spending and allocation of the proceeds of Financial Obligations.

D. The State Treasurer shall perform rebate computations until Financial Obligations are paid in full, in accordance with Internal Revenue Code regulations.

E. If applicable, the State Treasurer, may seek special tax counsel to opine on arbitrage regulations, and may employ arbitrage specialists as necessary to complete the required computations. 1.12 Disclosure and Continuing Disclosure A. The State Treasurer is responsible for disclosure responsibilities under the continuing disclosure undertakings of State Financial Obligations. The State Treasurer will make reasonable efforts to assist underwriters in their efforts to comply with SEC Rule 15c2-12 and the various MSRB rules pertaining to underwriters.

B. Consistent with any continuing disclosure undertakings executed by the State Treasurer, the State Treasurer will file a copy of the State’s CAFR, and other information the State Treasurer deems pertinent or is required to be filed under any continuing disclosure undertakings and will be disseminated to the market in a timely manner through www.emma.msrb.org or such successor as the SEC or MSRB may designate.

C. The State Treasurer implements the following post-issuance compliance procedures, to ensure each Financial Obligation complies with state and federal law and the financial covenants made by the State in the related financing documents governing the issuance. The State Treasurer may request information from the related State Agency including the following:

Tax Compliance. Upon the advice of tax or bond counsel, information required by the Internal Revenue Service for post-issuance compliance procedures of the issuance or incurrence of a particular type of Financial Obligation such as Qualified School Construction Bonds.
Private Use. Information necessary to monitor and take corrective action to comply with Internal Revenue Code requirements restricting the private use of facilities constructed with tax-exempt proceeds.
State Law Compliance. Documentation to ensure compliance with State law governing lease purchase financing that requires annual appropriation and renewal of a lease.
Financial Covenants. Information or documentation to ensure compliance with the covenants made by the State in the related financing documents requiring insurance and record retention.
Reporting Covenants. Information and documentation to ensure compliance with reporting requirements pursuant to documentation with providers of credit enhancement and/or liquidity support or continuing disclosure agreements. 1.13 Reporting Requirements of State Agencies A. State Agencies entering into Financial Obligations shall provide the following to the State Treasurer:

(1) No less than sixty (60) days prior to the date on which a State Agency expects that a Financial Obligation will be incurred, a State Agency shall provide written notice to the State Treasurer of that expectation;

(2) Not less than thirty (30) days prior to the date on which a State Agency expects that a refinancing of a Financial Obligation will be incurred, a State Agency shall provide written notice to the State Treasurer of that expectation;

(3) The State Agency shall provide the State Treasurer with information the State Treasurer considers necessary or appropriate to act as the issuing manager for the issuance or incurrence of the Financial Obligation, including, but not limited to cash flow projections associated with the repayment of any Financial Obligation;

B. No later than ten (10) days after a State Institution of Higher Education enters into or issues a Financial Obligation in a principal amount of one million dollars or more that is secured in whole or in part by State Revenues or revenues of the Institution of Higher Education and which the State Treasurer does not manage, including any bonds subject to the Higher Education Revenue Bond Intercept Program established in section 23-5-139, C.R.S., the State Institution of Higher Education shall notify the State Treasurer that it has entered into the Financial Obligation and shall provide at least the following information to the State Treasurer:

(1) A copy of any official statement or other offering document or memoranda for the issuance or incurrence of the Financial Obligation;

(2) A copy of any filings or correspondence with the federal Internal Revenue Service with respect to the issuance or incurrence, including, if applicable, a copy of each Form 8038 or Form 8038-G;

(3) A copy of the continuing disclosure undertaking; and (4) Any other information related to the issuance or incurrence of the Financial Obligation as requested by the State Treasurer and within the provisions of this regulation.

C. No later than ten (10) days after the High-Performance Transportation Enterprise (the "HPTE") created in section 43-4-806(2), C.R.S. or the Statewide Bridge Enterprise (the "Bridge Enterprise") created in section 43-4-805(2), C.R.S., enters into financial contracts or instruments specified in section 24-36-121(3)(a)(II)(A) and 24-36-121(3)(a)(II)(B), C.R.S., the HPTE and the Bridge Enterprise shall notify the State Treasurer that they have entered into or issued such a financial contract or instrument and shall provide at least the following information to the State Treasurer:

(1) A copy of any official statement or other offering document or memoranda for the issuance or incurrence of such a financial contract or instrument;

(2) A copy of any filings or correspondence with the federal Internal Revenue Service with respect to the issuance or incurrence, including, if applicable, a copy of each Form 8038 or Form 8038-G;

(3) A copy of the continuing disclosure undertaking; and (4) Any other information related to the issuance or incurrence of a financial contract or instrument as requested by the State Treasurer. _________________________________________________________________________ Editor’s Notes

History Entire rule emer. rule eff. 09/01/2012.

Entire rule eff. 12/15/2012.

Rules 1.4, 1.11 – 1.12 emer. rule eff. 06/14/2013.

Rules 1.4, 1.11 – 1.12 eff. 09/14/2013

8 CCR 1508-3 Rules Governing the Colorado Secure Savings Program {#sec-8-ccr-1508-3 omnilex-key=us-co-regs-official--department-22--8 CCR 1508-3}

DEPARTMENT OF THE TREASURY

RULES GOVERNING THE COLORADO SECURE SAVINGS PROGRAM

8 CCR 1508-3 [Editor’s Notes follow the text of the rules at the end of this CCR Document.] _________________________________________________________________________ 1508-3.1 Authority This regulation is adopted by the Board of the Colorado Secure Savings Program pursuant to its powers described in paragraphs (b), (f), and (i) in C.R.S. 24-54.3-103.5(1) and C.R.S 24.54.3-107. Pursuant to paragraphs (a), (b), (g), (h), (k), and (L) of C.R.S. 24-54.3-104(2), this regulation reflects the obligation of the Board to design the Program to promote greater retirement savings for private sector employees in a convenient, low-cost, and portable manner. Furthermore, the regulation is intended to be consistent with the requirements of the State Administrative Procedures Act 24-4-101 et seq. (the “APA”), C.R.S., the Colorado Secure Savings Program Act, and ERISA. 1508-3.2 Scope and Purpose This regulation governs Employers defined in C.R.S. 24-54.3-102(3), Employees defined in C.R.S. 24- 54.3-102(2), Voluntary Participants, Treasury Staff, Colorado Department of Labor and Employment, the Board, and the Program Administrator with respect to the Colorado Secure Savings Program. Pursuant to C.R.S 24-54.3-104(6) the regulations establish Participation requirements for Employers defined in 24.54.3-102(3). Furthermore, these regulations intend to satisfy the rulemaking obligations of the Board outlined in C.R.S. 24-54.3-107. 1508-3.3 Reserved 1508-3.4 Definitions The following definitions shall apply for purposes of the Program unless otherwise indicated in these rules:

“Acceptable Submission Method” means one or more modes of document submission detailed on the Program website.

“Account” means, individually or collectively as the context may require, each Roth IRA and Traditional IRA that has been established under the Program.

“Account Holder” means an individual for whom an Account is held under the Program. Account Holders include Onboarded Employees after the Opt-Out Period and Voluntary Participants for whom an Account is established.

“Act” means SB20-200 and the C.R.S. 24.54.3 Colorado Secure Savings Program Act.

“Automatic Escalation” means an additional 1% annual increase in an Account Holder’s Contributions at the beginning of each subsequent calendar year following the Account Holder’s Onboarding.

“Beneficiary” means the individual(s), person(s), or entity(ies) entitled to receive the proceeds of an Account upon the death of an Account Holder.

“Board” means the Colorado Secure Savings Program Board defined in C.R.S. 24-54.3-102(1).

“Capital Preservation Investment” means a Money Market account selected by the Board where Payroll Deductions are held during the Opt-Out period.

“CDLE” means the Colorado Department of Labor and Employment.

“Certificate of Exemption” means a record provided by the Program Administrator to a business entity that acknowledges said entity’s Exemption.

“Code” means the Internal Revenue Code of 1986, as amended, and any U.S. Department of Treasury regulations, rulings, announcements or other guidance issued thereunder.

“Coemployer” means, in accordance with C.R.S. 8-70-114, either an Employee Leasing Company or a Work-Site Employer.

“Confirmation Notice” means a document sent by the Program Administrator to Participating Employers, Account Holders, and Voluntary Account Holders after Onboarding Information is provided.

“Contribution” means monies contributed to an Account.

“Contribution Rate” means the whole-integer percentage of Wages contributed to an Account by an Account Holder.

“Custom Contribution Rate” means any Contribution Rate elected by the Account Holder as made available by the Program Administrator.

“Custom Investment” means any of the asset classes chosen by the Board besides the Default Investment Option “Default Contribution Rate” means five percent of Account Holder’s Wages.

“Default Investment Option” means the Target Date fund chosen by the Board, which correlates to the Account Holder’s birth year.

“Employee” means Employee as defined in C.R.S. 24-54.3-102(2).

“Employee Leasing Company” means any person, business, or other entity that provides services to a Work-Site Employer pursuant to an Employee Leasing Company Contract, as defined in paragraph (2)(a) of C.R.S. 8-70-114.

“Employee Leasing Company Contract” means any written staff leasing contract, extended employee staffing or supply contract, or other contract under which an Employee Leasing Company procures or receives from a Work-Site Employer specified Coemployer responsibilities for specified employees, designating itself as employer of such employees, and retaining the right of direction and control of such employees with regard to those employer responsibilities, including the rights and responsibilities set forth in paragraph (b) of subsection (2) of C.R.S. 8-70-114.

“Employer” means Employer as defined in C.R.S. 24-54.3-102(3).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exempt” means not required to Onboard or Participate in the Program.

“Exemption” means the certification by a business entity to the Program Administrator online through the Program website affirming that said entity does not meet the definition of Employer and therefore is neither required to Onboard nor Participate in the Program.

“Fee” means Fee as defined in C.R.S. 24-54.3-102(4).

“FEIN” means Federal Employment Identification Number provided by the IRS.

“Form 5500 Filing” means the Annual Return/Report of Employee Benefit Plan that is required to be filed for certain employee benefit plans under sections 104 and 4065 of ERISA and sections 6057(b) and 6058(a) of the Code.

“Grant” means a sum of money given by the Program to Participating Employers with between five and twenty-five Employees, as mandated in C.R.S. 24-54.3-103.5(f), for the purpose of incentivizing compliance with the Program and defraying costs incurred by this category of Employers.

“Hold and Sweep Period” means the 30 day period after the Opt-Out Period, during which time Contributions are held in a Capital Preservation Investment on behalf of Participating Employees.

“In Business” means (i) (ii) (ii) or (iv), the date which occurred closest to the present day: (i) the date of the IRS Form SS-4 or (ii) the date as of which the Colorado Secretary of State recorded the business formation document or (iii) the issue date of the Colorado Sales Tax License or (iv) the month and year when the business became liable for wage withholding with the CDLE.

“Inactive” means an Account to which no funds have been deposited for at least 12 months; or from which all funds have been withdrawn, rolled-over (out), or transferred.

“IRA” means, individually or collectively as the context may require, a Roth Individual Retirement Account or a Traditional Individual Retirement Account.

“IRS” means the Internal Revenue Service.

“Launch Date” means the date when the Program is open to the public.

“Non-Compliant Employer” means Employers that have neither certified Exemption nor are Participating Employers.

“Non-Payroll Contribution” means any amount, greater than or equal to five dollars, elected by an Account Holder that Account Holder remits outside of a Payroll Deduction Contribution.

“Onboard” means to furnish information to the Program Administrator in order to Participate in the Program.

“Onboarding” means the process by which Employers and Employees and Self-Employed Individuals furnish information to the Program Administrator in order to participate in the Program.

“Onboarding Information” means the information detailed in 1508-3.5.4 and required to be provided by an Employer, an Employee, or a Voluntary Participant to the Program Administrator to enable participation in the Program.

“Opt-Out Period” means the 30 day account revocation period following completion of Onboarding with the Program Administrator.

“Participate” means to remit either Employee Payroll Deduction Contributions or Contributions of Voluntary Participants to the Program Administrator.

“Participating Employer” means an Employer that is remitting Payroll Deduction Contributions to the Program Administrator.

“Participation” means the remittance of either Employee Payroll Deduction Contributions or Contributions of Voluntary Participants to the Program Administrator.

“Participating Individual” means either a Self-Employed Individual or a Voluntary Participant whose Onboarding Information has been received by the Program Administrator and who is remitting Contributions to an Account.

“Payroll Deduction Contributions” means Contributions made by an Onboarded Employee via a payroll deduction through a Participating Employer.

“Program” means the Colorado Secure Savings Program, which has been created by the Board pursuant to C.R.S. 24.54.3-103 “Program Administrator” means the third-party entity procured by the Board to assist in carrying out the requirements of the Act.

“Program Information” means a document provided by the Program Administrator after onboarding to both Employees and to Voluntary Participants, which outlines the program features including, but not limited to the items listed in C.R.S. 24-54.3-107.

“Registration Date” means a date established by the Board on which Employers are required to complete Onboarding into the Program.

“Roth IRA” means an individual retirement account within the meaning of section 408A of the Code.

“Self-Employed Individual” means an individual who either (i) carries on a trade or business as a sole proprietor or an independent contractor, or (ii) is a member of a partnership that carries on a trade or business, or (iii) is otherwise in business for himself or herself (including a part-time business or a “gig worker”) and who meets the qualifications to open an IRA.

“Tax-Qualified Retirement Plan” means, for purposes of the Program, an employee benefit plan that is qualified under section 401(a), 401(k), 403(a), 403(b), 408(k), 408(p), or 457(b) of the Code.

“Traditional IRA” means an individual retirement account within the meaning of section 408 of the Code.

“Treasury Staff” means one or more of the employees of the State of Colorado Department of Treasury.

“Voluntary Participant” means an individual who meets the qualifications to open an IRA but who does not meet the definition of Employee as defined in C.R.S. 24-54.3-102(2) and who are willing and able to provide Onboarding Information to the Program Administrator.

“Wages” means Wages as defined in C.R.S. 24-54.3-102(7).

“Work-Site Employee” means an individual who is in an employment relationship with both an Employee Leasing Company and a Work-Site Employer and has received written notice of coemployment with the Employee Leasing Company.

“Work-Site Employer” means any person, business, or other entity that procures the services of an Employee Leasing Company under an Employee Leasing Company Contract and otherwise retains direction and control of the employees specified in the contract regarding responsibilities not specified in the contract pertaining to the business of the work-site employer. 1508-3.5 Employers 1508-3.5.1. Multi-Party Employment Relationships.

A. Pursuant to C.R.S. 24-54.3-107(g)(2), existing state forms and state compliance structures are to be used for exemption reporting; therefore, the Employer or business entity whose EIN appears in CDLE’s records of payment unemployment insurance premiums per C.R.S.8-70-114 (2)(b)(VII) determines which employing unit is responsible for either certifying Exemption, or both Onboarding with the Program and Onboarding Employees.

B. Any Wages paid to the Work-Site Employee by the Employee Leasing Company with respect to services provided under the Employee Leasing Company Contract, shall be treated as Wages received from the Work-Site Employer.

C. Nothing in these rules prohibits an Employee Leasing Company and its Work-Site Employer from entering into an Employee Leasing Company Contract or other agreement under which the Employee Leasing Company agrees to assist the Work-Site Employer with the performance of some or all of the Work-Site Employer’s responsibilities under this section. 1508-3.5.2 Incentive Grants A. Participating Employers with between five and twenty-five Employees may apply for a Grant via the Colorado Treasury website after remitting at least one Payroll Deduction Contribution to the Program Administrator.

B. Treasury Staff will cross-check Grant applications with the monthly Payroll Deduction Contribution reports provided by the Program Administrator and will process Grant payments via U.S. Mail as soon as administratively possible. 1508-3.5.3 Employer Exemption A. Treasury Staff or Program Administrator may send Employers that are identified as not having a current Form 5500 on file with the U.S. Department of Labor written notice(s) directing the business entity to either Onboard with the Program or certify Exemption per process detailed in the ensuing section.

B. Process for certain business entities to certify Exemption 1. An authorized representative of a business entity shall certify, through the Program website that said entity either presently offers a Tax Qualified Retirement Plan, or has fewer than five Employees, or has been In Business for less than two years.

a. The business entity may reference the following state forms and compliance structures when determining its eligibility for Exemption i. business formation document(s) from Colorado Secretary of State ii. Sales Tax License from Colorado Department of Revenue, if applicable; and iii. CDLE’s Form UITR or other CDLE form that determines when the business became liable for wage withholding.

Upon receipt of the employer’s online certification of its reason for Exemption, the Program Administrator shall provide a Certificate of Exemption that will remain in effect so long as the business entity continues to offer a Tax Qualified Retirement Plan to some or all of its Employees or maintains fewer than five Employees. 1508-3.5.4 Employer Onboarding A. By or before its Registration Date in 2023, Employers shall either Onboard with the Program or obtain a Tax-Qualified Retirement Plan.

B. Employers shall submit the following Onboarding Information to the Program Administrator via the Program website or an Acceptable Submission Method:

Employer name and assumed business name, if any;
Federal Employer Identification Number;
Employer mailing address 4. Name, title, telephone number and email address of an individual designated by the employer to serve as the point of contact;
Number of Employees; and 6. Any additional information necessary to complete Onboarding.

C. In the event that the Program Administrator finds that any of the information listed in this subsection (b) is not available on the online portal or is inaccurate, employers shall provide the missing or correct information, as applicable 1508-3.5.5 Employer Restrictions A. Business entities that offer a Tax-Qualified Retirement Plan are not required to Onboard or Participate in the Program.

B. Business entities without a Tax Qualified Retirement Plan, that have been In Business for fewer than two years and have five or more Employees are not required to Onboard with the Program until the Employer achieves two years In Business.

Business entities without a Tax Qualified Retirement Plan that have been In Business for fewer than two years and have between two to four Employees will be allowed to Onboard and Participate in the Program by July 1st, 2024.

C. Business entities with between two to four Employees will be allowed to Onboard and Participate in the Program by July 1st, 2024.

D. Employers shall not:

Prohibit, restrict, or discourage Employee Participation in the Program.
Provide Account Holders or Beneficiaries of deceased Account Holders advice or direction regarding investment choices, Contribution Rates, Automatic Escalation, or any other decision about the Program.
Remit any Payroll Deduction Contributions for any Onboarded Employee who opted out of the Program.
Exercise any authority, control, or responsibility regarding the Program, other than those duties specifically described in sections 1508-3.5.6 and 1508-3.5.7.
Contribute to Account Holder’s Account. 1508-3.5.6 Onboarding of Employees by Participating Employer A. No later than 30 days following an individual’s 180th day of employment at a Participating Employer, the Employer shall provide the following information to the Program Administrator for each Employee:
Full legal name;
Social security number or taxpayer ID number;
Date of birth;
Mailing address;
Employee's designated email address, if available;
Employee's phone number, if available; and 7. Any additional information needed to complete the Onboarding when the information submitted for Onboarding is unclear or insufficient, or when further information is required for purposes of administering the Program B. Per C.R.S. 24-54.3-104(2)(L), prior to an individual’s 180 th day of employment by an Employer, an individual may Onboard into the Program as a Voluntary Participant may remit Contributions voluntarily. 1508-3.5.7 Withholding and Remitting of Payroll Deduction Contributions by Participating Employer A. Participating Employers shall not remit Payroll Deduction Contributions until after the Opt-Out Period.

B. During the Hold and Sweep Period, Participating Employers shall remit all Payroll Deduction Contributions to the Program Administrator as soon as administratively practicable, no later than fourteen days of Contribution being withheld from an Account Holder’s Wages.

C. Amounts withheld by the Participating Employer shall not exceed the amount of the Account Holder’s Wages remaining after any payroll deductions required by law or employer payroll practice to have higher precedence, including a court order. 1508-3.5.8 Responsibilities of Program Administrator to Participating Employers A. Onboarded and Participating Employers may contact the Program Administrator if they desire technical assistance in completing Program requirements.

B. Upon receiving the Employee’s Onboarding Information from the Employer, the Program Administrator shall email a confirmation to the Employer and send the Program Information to each Employee. 1508-3.6. Employees 1508-3.6.1 Right To Opt-Out A. An Employee Onboarded into the Program by an Employer may Opt-Out of the Program at any time.

B. No Account will be established if Employee opts-out during the Opt-Out Period.

C. Program Administrator shall send Program Information to Employees as soon as administratively possible after Onboarding is completed and shall send other important information including legal or other material information a reasonable investor would want to know before contributing by payroll deduction or directly.

D. Employees Onboarded by Employers are deemed to have read and understood the Program Information content, which includes instructions about how to Opt Out of the Program, as required by C.R.S. 24-54.3-107(k)3.

E. Those who opt out of the Program may re-Onboard at any time by providing the required Onboarding Information through the Program Website or an Acceptable Submission Method. 1508.3.7 Voluntary Participants A. Self-Employed Individuals and Voluntary Participants may Onboard with the Program as long as they meet the qualifications to open an IRA and provide the Onboarding Information required by the Program Administrator as follows:

Full legal name;
Social security number or taxpayer ID number;
Date of birth;
Mailing address;
Email address, if available;
Phone number, if available; and 7. Any additional information needed to complete the Onboarding when the information submitted for Onboarding is unclear or insufficient, or when further information is required for purposes of administering the Program B. Program Administrator shall send Program Information to Voluntary Participants and Self- Employed Individuals as soon as administratively possible after Onboarding is completed and shall send them the mandatory disclosures pursuant to C.R.S. 24-54.3-107(K).

C. Voluntary Participants and Self-Employed Individuals shall have one Account, regardless of whether the Voluntary Participant also makes Contributions from a single Participating Employer or multiple Participating Employers (simultaneously or separately throughout Account Holder’s lifetime).

D. After the Program Administrator establishes an Account for the Voluntary Participant or Self- Employed Individuals, the individual is considered an Account Holder. 1508-3.8 Accounts 1508-3.8.1 Contributions A. Minimum and Maximum Contribution Levels 1. It shall be the responsibility of the Account Holder or Voluntary Participant to determine whether he/she/they are eligible per the Code to make Contributions to an Account and whether the amount of their Contributions to an Account complies with the contribution limits established under the Code, and whether or not such Contributions are deductible.

B. Default Investment and Custom Investment options 1. The Program Information provided by Program Administrator shall instruct Account Holders on how to select Custom Investments versus the Default Investment Option.

In the Employee portal on the Program website, Account Holders may direct their Contributions to any of the available fund options offered by the Program.
During the Hold and Sweep Period, Contributions will be directed into the Capital Preservation Investment.
After the Hold and Sweep Period, Program Administrator shall direct Contributions from the Capital Preservation Investment into the Default Investment Option, unless an Account Holder has elected a Custom Investment.
Account Holders may change their investment choice at any time after Employer completes Onboarding.

C. Default Contribution Rate and Custom Contribution Rate 1. The Program Information provided by Program Administrator shall instruct Account Holders on how to elect a Custom Contribution Rate distinct from the Default Contribution Rate.

In the Employee portal on the Program website, Account Holders may elect any Contribution Rate that is a whole-number percentage and may direct their Contributions to any of the available fund options offered by the Program.
During Hold and Sweep Period, Participating Employers will remit the Default Contribution Rate on behalf of Account Holder into the Capital Preservation Investment, unless the Account Holder elected a Custom Contribution Rate during the Opt Out Period.
Account Holder Contributions made subsequent to the Hold and Sweep Period will be made at the Default Contribution Rate unless a participant has elected a Custom Contribution Rate.
Account Holders may change their Contribution Rate to any whole integer percentage at any time after Employer completes Onboarding of Employees. 1508-3.8.2 Non-Payroll Contributions A. Any Account Holder may choose to make Non-Payroll Contributions to the Program.

B. Such Contributions must not exceed, in combination with Payroll Deduction Contributions, the annual IRA contribution limit as determined by the Code and related rules promulgated by the IRS.

C. The Program Administrator will establish the minimum contribution for Non-Payroll Contributions and the Program website will be current with this information.

D. Non-Payroll Contributions may be made electronically or by personal check. 1508-3.8.3 Automatic Escalation A. Contributions for Account Holders who have Participated in the Program for at least six months will automatically increase by 1% of an Account Holder’s Wages at the beginning of each subsequent calendar year, up to a maximum of 8% of an Account Holder’s wages.

B. On an annual basis, the Program Administrator shall notify all Account Holders in advance of any Contribution increase to allow for Account Holders to opt out of Automatic Escalation or to change their Contribution Rate.

C. Account Holders may adjust the rate of their Automatic Escalation, or opt in to Automatic Escalation, or opt out of Automatic Escalation at any time through the Program website. 1508-3.8.4 Termination of Participating Employer Status through Program Exemption A. Participating Employers who begin offering a Tax Qualified Retirement Plan must notify the Program Administrator at least sixty days prior to the cessation of Payroll Deduction Contributions.

B. Upon a Participating Employer becoming Exempt, remittance of Payroll Deduction Contributions on behalf of Account Holders is prohibited.

C. Participating Employers that have become Exempt must notify Account Holders at least thirty days before Payroll Deduction Contributions cease and provide them with information describing how to contact the Program Administrator.

D. Unless Account Holders elect otherwise, Accounts will remain in the Program after the Participating Employer certifies its Exemption.

E. Conversion of status of Account Holders 1. If the Participating Employer became Exempt due to its number of Employees falling below five, the status of the remaining Employees of the now-Exempt Employer automatically convert to Voluntary Participants.

Exempt Employers with 2-4 Employees are prohibited from remitting Payroll Deduction Contributions for Voluntary Participants. 1508-3.8.5 Portability A. Rollovers and Transfers 1. Rollover or Transfer In a. An Account Holder may receive rollovers and transfers from other retirement savings vehicles in accordance with the time limits established under Title 26 of the Code.
Rollover or Transfer Out a. The Program Administrator shall determine the process through which an Account Holder or Beneficiary may roll over or transfer all or a portion of a Program IRA to a different retirement savings vehicle in accordance with the Code. 1508-3.8.6 Withdrawals A. Account Holder may withdraw all or a portion of funds from their Account at any time by submitting a completed request to the Program Administrator, in a form or format established by the Program and permitted by the IRS.

B. The Program shall not assess any penalty for withdrawals. Withdrawals shall be subject to any applicable State and federal income tax obligations and may be subject to penalties under the Code. 1508-3.8.7 Account Closure A. The Program Administrator and Treasury Staff will agree determine a process for closing Inactive Accounts. 1508-3.8.8 Abandoned Accounts A. An Account shall be presumed abandoned according to the unclaimed property law of the state of the last known address of the Participating Employee or Participating Individual. If the last known address of the Participating Employee or Participating Individual is in Colorado, the provisions of the Uniform Disposition of Unclaimed Property shall apply. If there is no last known address of the Account Holder in the Program records, federal common law shall determine the state with the first priority claim. 1508-3.9 Enforcement A. The Program will partner with CDLE to enforce compliance with the Act.

B. CDLE will fine Non-compliant Employers one-hundred dollars for each Employee per year, not to exceed five thousand dollars in a calendar year.

C. Process 1. Treasury Staff together with Program Administrator shall determine Registration Dates for Employers based on number of Employees.

Treasury Staff together with Program Administrator will notify Employers via first-class US Mail not only of their respective Registration Dates but also in advance of receiving Final Notice of Penalty Application.
After Registration Dates have passed, CDLE will send three Notices of Non-Compliance to Non-Compliant Employers which provide instructions on how either to Onboard with the Program or to certify Exemption.
Fines shall commence no earlier than twelve months after the Registration Date or one year after an Employer is scheduled to enter the program, whichever is later. In no event shall a fine be assessed earlier than three months after the first Notice of Non- Compliance is postmarked.
Within 30 days of the date listed on the Final Notice of Penalty Application, Non- Compliant Employers shall remit to CDLE annual fines according to section 1508- 3.5.9(B)1 above. 1508-3.10 Confidentiality Program Administration shall comport with C.R.S. 24-54.3-110. 1508-3.11 Severability If any portion of these rules is found to be invalid, the remaining portion of the rules shall remain in force and effect. _________________________________________________________________________ Editor’s Notes

History New rule eff. 12/15/2022.

Code of Colorado Regulations — Department of Treasury

1508 State Treasurer

8 CCR 1508-1 Unclaimed Property {#sec-8-ccr-1508-1 omnilex-key=us-co-regs-official--department-22--8 CCR 1508-1}

8 CCR 1508-2 State Public Finance Policy {#sec-8-ccr-1508-2 omnilex-key=us-co-regs-official--department-22--8 CCR 1508-2}

8 CCR 1508-3 Rules Governing the Colorado Secure Savings Program {#sec-8-ccr-1508-3 omnilex-key=us-co-regs-official--department-22--8 CCR 1508-3}

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