The Senate Committee on Appropriations voted 5–2 to advance HB25B‑1003, a bill that would discontinue Colorado’s long‑standing reduced insurance‑premium tax rate for regional or “home” insurance offices. Sponsors said the Office of the State Auditor’s reports from 2020 and 2025 show the tax reduction has not produced the jobs or local economic activity intended and that repeal would free revenue for state priorities.

Why it matters: The insurance premium tax reduction dates to 1959 and was intended to attract insurance companies’ regional offices and jobs to Colorado. State audit work reviewed decades of data and found that many qualified groups collectively reduced their Colorado workforce while claiming tax benefits; the 2025 OSA report surveyed groups and found several said the statutory workforce requirement was not influential in their decisions to locate employees in Colorado. Sponsors argued the credit is inefficient and that ending it will help close the state’s budget gap without cutting core services.

Testimony and concerns: Supporters included anti‑poverty and fiscal policy groups and county leaders who said repealing an ineffective subsidy will preserve funds for schools, Medicaid and public infrastructure. Opponents — including industry representatives and property/casualty and life insurers — warned that removing the 1% reduction could push employers to relocate offices and employees to other states, eroding the tax base, charitable giving and local economic ties. Industry witnesses suggested a temporary pause could be preferable to full repeal.

Fiscal and statutory mechanics: The fiscal note projects $44.1 million in additional state revenue in the current fiscal year and larger amounts in subsequent years if the reduced rate ends. Sponsors told the committee the statutory “waterfall” allocating some revenue to specific purposes had already been repealed effective 07/01/2025, so ~all additional funds would flow to the general fund for appropriation by the legislature. The committee discussed job‑count differences among states and whether dynamic economic modeling was warranted.

Outcome: The committee advanced HB25B‑1003 to the committee of the whole, recording a 5–2 roll call vote. Sponsors said they will seek to use the funds for general operations and to shore up budget pressures; opponents said they will watch for relocation risks and raised the question of TABOR referral.