1. (1) Definitions. As used in this section, unless the context otherwise requires:

   1. (a) Child means a first responder's adopted child, stepchild, or biological child and includes a biological child born after the eligible first responder's death.
   2. (b) Firefighter has the same meaning as set forth in section 29-5-501 (2).
   3. (c) First responder means a peace officer, firefighter, or emergency medical service provider.
   4. (d) Fulfillment year means the state fiscal year during which the state treasurer has transferred a total of three hundred fifty million dollars to the fund pursuant to subsection (2)(b) of this section.
   5. (e) Fund means the peace officer training and support fund established in subsection (2) of this section.
   6. (f) Law enforcement agency means a county sheriff's office, a municipal police department, a town marshal's office, or a municipal court.
   7. (g) Occupational disease means, but is not limited to, cancers, respiratory illnesses, cardiovascular conditions, and other diseases or conditions that are reasonably determined to have arisen from exposure to hazardous substances, extreme physical exertion, or traumatic events while serving as a first responder.
   8. (h) Parent means a first responder's biological parent or adoptive parent.
   9. (i) Peace officer means a certified peace officer described in section 16-2.5-102 and a noncertified deputy sheriff or detention officer as described in section 16-2.5-103 (2).

   10. (j)

       1. (I) Permissible purpose means the initial and continuing education and training for peace officers and the compensation of peace officers.
       2. (II) As used in this subsection (1)(j), compensation means pay to a newly hired, current, or rehired peace officer, reimbursement to a peace officer for tuition paid to attend a training academy, and bonuses paid to peace officers for hiring, rehiring, merit, or retention.
   11. (k) Spouse means an individual to whom an eligible first responder is married or with whom an eligible first responder has established a civil union.
   12. (l) Training academy has the same meaning as set forth in section 24-31-304 (1).
2. (2) Peace officer training and support fund. (a) The peace officer training and support fund is created in the state treasury. The fund consists of gifts, grants, donations, money credited to the fund pursuant to this section, and any other money that the general assembly may appropriate or transfer to the fund.

3. (b)

   1. (I)

      1. (A) On July 1, 2026, the state treasurer shall transfer fifteen million dollars from the general fund to the fund.
      2. (B) In state fiscal year 2026-27, the general assembly may appropriate twenty million dollars from the general fund to the fund.
   2. (II) On July 1, 2027, and each July 1 thereafter through July 1 of the fulfillment year, the state treasurer shall transfer an amount equal to the greater of fifteen million dollars or the adjusted investment amount from the general fund to the fund.

   3. (III) As used in this subsection (2)(b), unless the context otherwise requires:

      1. (A) Adjusted investment amount means, for any year, the reported reduction in that year minus the backfill amount and plus the payback amount.
      2. (B) Backfill amount means the cumulative difference between the reported reduction and fifteen million dollars in every previous year in which the reported reduction was less than fifteen million dollars.
      3. (C) Reported reduction means, for any year, the amount of the reduction in the warrant issued pursuant to section 24-51-414 (1) reported to the state treasurer by the office of state planning and budgeting pursuant to section 24-51-414 (8.5)(a)(II).
      4. (D) Payback amount means the cumulative difference between the reported reduction and the amount that the state treasurer transferred from the general fund to the fund in every previous year in which the reported reduction was greater than fifteen million dollars.
4. (c) The state treasurer shall credit all interest and income derived from the deposit and investment of money in the fund to the general fund.
5. (d) Money in the fund is continuously appropriated to the department for the department to distribute in accordance with subsection (3)(b) of this section; and for state fiscal years commencing on or after July 1, 2026, the general assembly may annually appropriate no more than two and one-half percent of the amount that the state treasurer transfers to the fund in that same fiscal year pursuant to subsection (2)(b) of this section to the department for the direct and indirect costs of administering subsection (3) of this section.

6. (3) Peace officer training and support distribution. (a) Law enforcement agency certification. On or before December 15, 2026, and each December 15 thereafter through the fulfillment year, a law enforcement agency may submit a certification to the department in a form and manner determined by the department. The certification shall include:

   1. (I) The number of peace officers that the relevant local government has budgeted for the law enforcement agency in the upcoming year;
   2. (II) The total dollar amount that the relevant local government budgeted for the law enforcement agency to expend for a permissible purpose;
   3. (III) A resolution or ordinance adopted by the relevant local government that the local government will only expend money awarded by the department from the fund in accordance with the requirements of subsection (3)(c) of this section; and
   4. (IV) If the law enforcement agency is a sheriff's office, a certification by the law enforcement agency that it will only expend money awarded by the department from the fund in accordance with the requirements of subsection (3)(c) of this section.
   5. (b) Distribution formula. (I) No later than December 31, 2026, and each December 31 thereafter through the fulfillment year, the department shall annually disburse from the fund to each eligible law enforcement agency an amount equal to the base amount plus the total of the number of peace officers that the law enforcement agency identified for that year pursuant to subsection (3)(a)(I) of this section multiplied by the peace officer adjustment.

   6. (II) As used in this subsection (3)(b), unless the context otherwise requires:

      1. (A) Base amount means fifteen thousand dollars.
      2. (B) Eligible law enforcement agency means, for any year, a law enforcement agency that submits a certification to the department in that year pursuant to subsection (3)(a) of this section.
      3. (C) Peace officer adjustment means, for any year, an amount equal to the amount that the state treasurer transferred to the fund in that year pursuant to subsection (2)(b) of this section, minus the amount annually appropriated by the general assembly pursuant to subsection (2)(d) of this section for the department's direct and indirect costs of administering this subsection (3) for the fiscal year that commences in that year, minus the base amount multiplied by the number of eligible law enforcement agencies that year, divided by the total number of peace officers that eligible law enforcement agencies identified pursuant to subsection (3)(a) of this section that year.
      4. (c) Supplanting and supplementing. (I) (A) A law enforcement agency shall only spend, and a local government shall only budget for a law enforcement agency to spend, any money received pursuant to this subsection (3) for a permissible purpose; and
      5. (B) A law enforcement agency shall spend, and a local government shall budget for a law enforcement agency to spend, the money that the law enforcement agency receives pursuant to this subsection (3) to increase funding that would, in the absence of money from the fund, be made available from other state or local sources. A law enforcement agency shall not spend, and a local government shall not budget for a law enforcement agency to spend, money that the law enforcement agency receives pursuant to this subsection (3) to supplant other money that would, in the absence of the money received pursuant to this subsection (3), be made available from other state and local sources for a permissible purpose.
      6. (II) A law enforcement agency or a local government is presumed to have violated subsection (3)(c)(I)(B) of this section if the law enforcement agency or local government reduces or replaces the budgeting with or expenditure of federal, local, or state money in the immediately preceding year used for a permissible purpose with money received pursuant to this subsection (3) because the local government already budgeted for or the law enforcement agency already expected or received money pursuant to this subsection (3); and

      7. (III) A law enforcement agency or local government rebuts a presumption established pursuant to subsection (3)(c)(II) of this section if the law enforcement agency or local government establishes by contemporaneous records that:

         1. (A) The law enforcement agency or local government reduced or eliminated expenditures for multiple purposes other than for a permissible purpose;
         2. (B) There was a reduction in federal, local, or state money paid to the law enforcement agency or local government for a permissible purpose; and
         3. (C) The law enforcement agency or local government reduced or eliminated permissible purpose expenditures without taking into consideration the receipt or expected receipt of money pursuant to this subsection (3).
      8. (IV) The department may enforce the requirements of this subsection (3) through the review of audits pursuant to section 29-1-603 (6)(b) and may take corrective action by working with a law enforcement agency to ensure compliance with this subsection (3).

7. (4) First responder death benefit administration. (a) (I) If the executive director determines that a first responder has died on or after November 5, 2024, as the direct and proximate result of a personal injury sustained while performing their official duties or because of an occupational disease arising out of and in the course of their employment or service as a first responder, the department shall pay a benefit of one million dollars from the death benefit fund created in subsection (4)(e)(I) of this section as follows, if the indicated payee is living on the date on which the executive director makes the determination described in this subsection (4)(a)(I):

   1. (A) If there is no child who survived the first responder, to the surviving spouse of the first responder;
   2. (B) If there is at least one child who survived the first responder and a surviving spouse of the first responder, fifty percent to the surviving child or children, in equal shares, and fifty percent to the surviving spouse;
   3. (C) If there is no surviving spouse of the first responder, to the surviving child or children, in equal shares;
   4. (D) If there is no surviving spouse of the first responder and no surviving child, to the surviving individual or individuals designated by the first responder in the most recently executed designation of beneficiary on file at the time of death with the governing body or state agency, apportioned in accordance with the designation of beneficiary or, if apportionment is not indicated, in equal shares;
   5. (E) If there is no surviving spouse of the first responder, no surviving child of the eligible first responder, and no individual qualifying under subsection (4)(a)(I)(D) of this section, to the surviving beneficiaries under the most recently executed life insurance policy of the first responder on file at the time of death with the governing body or state agency, apportioned in accordance with the insurance policy or, if apportionment is not indicated, in equal shares; or
   6. (F) If there is no individual qualifying under subsections (4)(a)(I)(A) to (4)(a)(I)(E) of this section, to the surviving parent or parents, in equal shares, of the first responder; and
   7. (II) If the executive director is unable to identify an individual described by subsections (4)(a)(I)(A) to (4)(a)(I)(F) of this section for a first responder, then no payment is made pursuant to this section for that first responder.
   8. (b) If the executive director determines that a first responder has died on or after November 5, 2024, as the direct and proximate result of a personal injury sustained while performing their official duties or because of an occupational disease arising out of and in the course of their employment or service as a first responder, if that first responder has died after separation from service as a first responder, while on an authorized leave of absence as a first responder, or while performing qualified military service, as defined in 26 U.S.C. sec. 414 (u)(5), the department shall pay a benefit to a payee in connection with that first responder in accordance with subsection (4)(a) of this section.
   9. (c) A payment under this section shall not be used to offset or reduce payments available from any other source, including a public disability plan or insurance plan, private disability plan or insurance plan, or benefits provided under Colorado's workers' compensation law.

   10. (d)

       1. (I) The executive director shall determine whether a first responder whose death results in a payment pursuant to this subsection (4) qualifies for line-of-duty status under section 101 (h) of the federal Internal Revenue Code of 1986 and whether any of the exceptions specified in section 101 (h)(2) of the federal Internal Revenue Code of 1986 are applicable and shall inform the taxpayer who receives the payment and the department of revenue of the executive director's decision.
       2. (II) A taxpayer who receives a payment pursuant to this subsection (4) that does not qualify for the federal income tax exemption described in section 101 (h) of the federal Internal Revenue Code of 1986, including a payment that does not qualify as a result of the exceptions described in section 101 (h)(2) of the federal Internal Revenue Code of 1986, shall, pursuant to section 39-22-104 (4)(ee), subtract the amount of the payment from the taxpayer's federal taxable income. The executive director shall provide the taxpayer and the department of revenue any information deemed necessary by the department of revenue for this tax subtraction.

   11. (e)

       1. (I) The death benefit fund is created in the state treasury. The fund consists of gifts, grants, and donations credited to the fund and any other money that the general assembly may appropriate or transfer to the fund.
       2. (II) In accordance with section 24-36-114 (1), the state treasurer shall credit all interest and income derived from the deposit and investment of money in the death benefit fund to the general fund.

       3. (III)

          1. (A) Money in the fund is annually appropriated to the department for paying benefits pursuant to this subsection (4) and for the direct and indirect costs of administering this subsection (4).
          2. (B) The department may expend no more than two percent of the money that the general assembly annually appropriates to the death benefit fund for the direct and indirect costs of administering this subsection (4).

       4. (IV)

          1. (A) On July 1, 2025, and July 1, 2026, the state treasurer shall transfer five million dollars from the general fund to the death benefit fund.
          2. (B) On July 1, 2027, and each July 1 thereafter, if the balance of the death benefit fund is less than ten million dollars, on July 2 of that year, the state treasurer shall transfer an amount from the general fund to the death benefit fund equal to the difference between ten million dollars and the balance of the death benefit fund.
8. (5) Technical assistance. The department shall, subject to available appropriations, provide technical assistance to law enforcement agencies and local governments in complying with the requirements of this section and section 29-1-603.
9. (6) Rules. The executive director shall adopt rules that specify standards and establish procedures as necessary to determine whether section 101 (h) of the federal Internal Revenue Code of 1986, as amended, applies to a payment awarded pursuant to subsection (4) of this section and may adopt additional rules as necessary to implement this section.

Source: L. 2025: Entire section added, (SB 25-310), ch. 359, p. 1947, § 4, effective June 2.