Colorado lawmakers kill their own bill to put state guardrails on the §25F SGO list

Colorado has spent more time inside the federal Scholarship Tax Credit (FSTC / ECCA / §25F) than almost any Democratic-led state, and on April 30, 2026 its legislature quietly decided not to wall the program off. The House Education Committee voted 11-0 to postpone HB26-1292 indefinitely, killing the only bill that would have attached state conditions to Colorado's participation. Introduced February 23, 2026 and titled simply “Scholarship Granting Organizations,” the measure carried prime sponsors Rep. Lori Goldstein (D-Westminster) and Sens. Cathy Kipp and Janice Marchman, all Democrats. The committee's roster of action lists the bill's status, plainly, as Lost. With the 2026 session closing without a replacement, Colorado will enter §25F on January 1, 2027 with no state-added SGO or school-eligibility restrictions.

What the bill would have done is the substance of the story. HB26-1292 would have required Colorado to include every OBBBA-eligible Scholarship Granting Organization (SGO) on the list it submits to the U.S. Treasury, removing state discretion to omit organizations, while simultaneously imposing nondiscrimination requirements on the private schools that enroll scholarship recipients. Those requirements reached across race, religion, disability, sexual orientation, and gender identity, and the bill folded in disability-law obligations as well. It was, in effect, an attempt to take the federal credit on Colorado's civil-rights terms: list all qualifying SGOs as the statute demands, but condition the schools downstream. Backers included the Colorado Education Association and a set of school districts; opposition came from the Colorado Association of Private Schools and Christian Home Educators of Colorado, the constituencies the conditions would have bound.

The decisive opposition, though, came from inside the party. Gov. Jared Polis's office said the bill “would hamstring the state's ability to bring new funding for much-needed services like afterschool programming and tutoring,” a notable position given that Polis had been among the earliest Democratic governors to opt Colorado in back in December 2025 and had publicly defended that decision against anti-discrimination objections days after the committee vote. It is worth not overstating the intent behind the 11-0 motion: sponsor Rep. Goldstein framed the postponement as a decision to wait for finalized federal rules and to gather more stakeholder input, not as a hostile burial. The procedural reality is nonetheless striking. A Democratic-controlled committee unanimously shelved its own party's SGO-restriction bill, leaving Colorado's §25F list unconditioned for the program's launch.

The defeat doubles as a data point in the larger floor-versus-ceiling debate over how much authority states actually have. Treasury's November 2025 notice had already indicated that states may lack the power to add SGO requirements beyond what OBBBA sets, the exact question HB26-1292 would have tested in court had it passed. By stepping back to await federal guidance instead, Colorado avoided the collision that Vermont's H.933 invites, where lawmakers legislated the strings directly. The contrast is the takeaway for donors and prospective SGO operators: the Democratic state furthest into §25F declined to test state guardrails, signaling a cleaner, less encumbered participation path in Colorado. The §25F donor credit remains capped at $1,700 per return and the program still launches January 1, 2027 regardless of how the state-conditions fight resolves, but where a state lands on guardrails shapes which SGOs can list and which schools can enroll recipients, and Colorado just removed that variable, at least for now. Current status for Colorado and every other state is tracked on our Colorado state page and the participation map, and operators weighing a launch can review the SGO directory and the explainers.