Bills target business climate change

DENVER — For a state with a reputation for being business-friendly, Colorado officials and lawmakers feel they lack the financial incentives and assistance programs many other states can offer companies.

In the next four months, legislators in the Colorado General Assembly will attempt to change that.

The assembly opened its 2013 session Jan. 9 and is to adjourn May 8. Among the scores of bills submitted during its opening days are some that lawmakers believe would improve Colorado’s business climate.

The current climate isn’t bad — a 2012 survey by CNBC ranked Colorado the fifth-best state in which to do business — but lawmakers in other states are working hard to gain ground on Colorado, including offering tax breaks and incentives Colorado cannot match.

“Surrounding states are doing infinitely more than we’re doing,´ said Sen. Rollie Heath, the Democrat who represents Boulder and most of western Boulder County. Heath is a member of the Senate Business, Labor and Technology committee.

The centerpiece of lawmakers’ efforts is the Colorado Advanced Industries Acceleration Act (HB 13-1001). Leaders in both houses and Gov. John Hickenlooper support the bill, which has a Republican co-sponsor in the House. Heath is a Senate co-sponsor.

The bill would create a grant program that would provide proof-of-concept grants, seed money and retention and infrastructure grants to businesses in “advanced industries” including advanced manufacturing, aerospace, bioscience, electronics, energy and natural resources, infrastructure engineering and information technology.

Sponsors want the program to be able to distribute $15 million per year for the next 10 years. Grants for proof-of-concept projects would be capped at $150,000, and early-stage capital grants and retention incentives would be capped at $250,000. The program would be run by the Colorado Office of Economic Development and International Trade, or OEDIT.

The ideal beneficiaries of the grants are startups with promising technology that need investment that is not always readily available, Heath said.

“Very, very early-stage capital is very, very difficult to find,” he said. “We picked these core industries, which obviously from Boulder County’s standpoint have a huge impact, and (would) provide the opportunity for funding when it can be hard to get,” Heath said.

There is one problem, however. As of now, the bill’s sponsors have not identified a source for all the money they want for the grant program, Heath said. Some money will come from programs already established for biotech and clean-energy companies, and the bill allows the state to accept gifts, grants and donations for the program. But the majority would come from sources yet to be identified by the Legislature.

Heath has one source in mind. He plans to introduce another bill that would change how the state runs the enterprise-zone program. That program issues tax incentives to encourage businesses to locate and expand into “economically distressed” areas, according to the OEDIT.

The program has been criticized in recent years as a bad deal for the state and for not having the desired economic impact. Last year, a task force met to study how to reform the program. Heath said he plans to base his bill on its recommendations, which included placing a $1 million cap on tax credits companies receive for capital investment. The new cap reportedly would have let the state keep an additional $18 million per year since 2006.

Details of the bill “are being worked out as we speak,” Heath said.

Another early bill, HB 13-1002, would require the OEDIT to budget $500,000 for the next two years to local business-development centers. HB 13-1003 would require $200,000 of that money to be used on an “economic gardening” pilot program intended to nurture second-stage companies with from six to 99 employees.

Democrats, with firm control of both houses and the governor’s office, will set the agenda. However, Republicans plan to push bills of their own that they feel will protect or promote small businesses.

One, House Bill 13-1069, would require legislative staff to prepare a small-business fiscal impact statement for every measure. The intent of the bill is to make legislators more aware of how their bills affect businesses with 50 or fewer employees. Companies will have the chance to comment on each bill during a five-day period soon after a bill is first introduced. The staff would compile the feedback and then prepare an impact statement for legislators.

Outside of the Legislature, lobbying and advocacy groups such as the Colorado Association of Commerce and Industry will keep watch on what bills are introduced.

CACI officially urges “legislative restraint” for this session, and the major topics it is watching include potential changes to the workers’ compensation system and the establishment of bidding preferences for Colorado companies seeking state contracts. Restrictions on natural gas drilling and changes to enterprise zones also are on the list, as are the measures funding small-business development centers and the economic gardening program.

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