Colorado Special Session Adjourns After Six Days

Posted by Katie March on August 26, 2025

Colorado’s Special Session adjourned on Tuesday, August 26, after six long days of debate including working through the entire weekend.

The Governor called the legislature in to address the large budget shortfall that was created in the state due to the Federal tax bill and to address Colorado’s artificial intelligence bill.

If you haven’t followed the GoWest blog – check out the last update on Colorado’s special session here.

Over the course of the special session the legislature considered 35 bills and resolutions and passed 13. Of those, both an artificial intelligence bill passed – although not a bill to amend the provisions of SB 24-205 – and a bill to eliminate the vendor fee passed.

Artificial Intelligence: After much deliberation and some very intense negotiation, the legislators, businesses, tech companies, labor unions, education stakeholders, and everyone else involved in the artificial intelligence debate reached a stalemate in their discussion on what to do with the two remaining artificial intelligence bills over the weekend. In a last-minute compromise, all sides begrudgingly agreed to “kick the can” and pass a clean extension to the implementation deadline, amending Rodriguez’s SB25B-004 to simply delay the effective date of Senate Bill 24-205 to June 30, 2026. This will require the legislature to undergo more of these fun-filled negotiations on artificial intelligence during the 2026 legislative session.

A full list of all of the bills passed during special session:

• SB25B-001, Process to Reduce Spending During Shortfall Under current law, if state revenue will be insufficient in the current fiscal year to continue the functions of state government, the Governor may issue an executive order, end or pause the functions of state agencies for up to three months.  The bill requires the Governor to notify the Joint Budget Committee (JBC) and for the JBC to hold a hearing with the Governor and OSPB regarding any planned reduction in state spending.
• SB25B-002, State-Only Funding for Certain Entities The bill requires the Dept. of Health Care Policy and Financing to use state funds to reimburse entities that are prohibited from receiving federal reimbursement from the Centers for Medicaid and Medicare Services under HR 1.
• SB 25B-003, Healthy School Meals for All The bill allows revenue raised under Prop. MM to support access to food through Healthy School Meals for All and the Supplemental Nutrition Assistance Program.
• SB 25B-004, Increase Transparency for Algorithmic Systems While the introduced bill sought to rewrite many of the provisions of SB 24-205, originally passed to guard against algorithmic discrimination. Ultimately, agreement on a path forward to facilitate compliance with the law could not be reached and SB25B-004 was amended to solely extend the effective implementation date of SB24-205, which was extended until June 30, 2026.
• SB25B-005, Reallocate Department of Natural Resources Wolf Funding to Health Insurance Enterprise. The bill transfers $264,268 from Colorado Parks and Wildlife appropriated for wolf reintroduction in the current fiscal year to the Health Insurance Affordability Cash Fund.
• HB25B-1001, Qualified Business Income Deduction Add-Back The bill extends indefinitely the requirement that certain taxpayers (LLCs, S corps and sole proprietorships with income greater than $500,000 for a single filer and $1 million for joint filers) to add back their federal qualified business income deduction when calculating their Colorado taxable income for years 2021 through 2025.
• HB25B-1002, Corporate Income Tax Foreign Jurisdictions The bill creates a state corporate taxable income addition for federal foreign-derived eligible income deductions, expands a state subtraction from corporate income, adds countries to the list of specified foreign jurisdictions presumed to be used for tax avoidance and allows state discretion to be used in determining foreign tax avoidance.
• HB25B-1003, Insurance Premium Tax Rate for Home Offices Beginning in calendar year 2026, the bill repeals the reduced insurance premium tax rate for insurance companies that qualify as having a regional home office in Colorado.
• HB25B-1004, Sale of Tax Credits Beginning in 2025-2026, the bill permits the State Treasurer to sell insurance premium tax credits to insurance companies and income tax credits to C-Corporations. The proceeds of the sales are required to be deposited in the General Fund.  The limit on the tax credits would be $125 million.
• HB25B-1005, Eliminate State Sales Tax Vendor Fee Under current law, retailers are allowed to keep 4% of their sales tax collections, up to $1,000 per retailer per filing period, to cover their expenses of collecting state sales tax on behalf of the state. The bill eliminates the vendor fee beginning January 1, 2026.
• HB25B-1006, Improve Affordability Private Health Insurance The bill transfers proceeds from the sale of insurance premium tax credits and income tax credits for C Corporations (up to $125 million) to the Health Insurance Affordability Enterprise (HIAE) Cash fund which was created to reduce individual insurance market premiums. The bill also transfers $10 million from the Refinance Discretionary Account (originally slated for a pedestrian bridge near the Capitol) to the HIAE cash fund.

Finally, Representative Ryan Armagost resigned on Thursday, and today the legislature passed a resolution condemning his actions towards one of his colleagues. The debate took a large portion of the day and will have impacts on the future tenor and tone of the chamber. The Colorado Sun wrote a good synopsis of the story, if you would like to read more. Expect a replacement for Representative Armagost in the coming weeks via vacancy committee.

Posted in Advocacy on the Move, Colorado Advocacy.