House Committee on Business, Labor, Economic, & Workforce Development (02/04/2014)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON BUSINESS, LABOR, ECONOMIC, & WORKFORCE DEVELOPMENT

Date:	02/04/2014	ATTENDANCE

Time:	01:34 PM to 06:02 PM	Exum	X
		Hamner	X
Place:	LSB A	Holbert	*
		Navarro	X
This Meeting was called to order by		Nordberg	X
	Representative Williams	Rosenthal	X
		Ryden	X
This Report was prepared by		Szabo	*
	Erin Vanderberg	Wright	*
		Kraft-Tharp	X
		Williams	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB14-1014 HB14-1093 HB14-1070 HB14-1071		Amended, Referred to Finance Amended, Referred to Appropriations Postponed Indefinitely Postponed Indefinitely

01:35 PM -- House Bill 14-1014

Representative Williams, chair, called the meeting to order. A quorum was present. Representative Kraft-Tharp and Representative DelGrosso, sponsors, presented House Bill 14-1014, concerning modifications to the job growth incentive tax credit. Beginning in tax year 2014, the bill modifies the job growth incentive tax credit by:

• extending the period for which an employer may receive credits from 60 months (five years) to 96 months (eight years);
• lowering the requirement that wages for jobs generating the credit be at least 110 percent of the average wage in the county within which the jobs are created to 100 percent of the county's average wage; and
• altering the burden of proof that the credit was instrumental to the creation of said jobs; rather than stating that without the credit the jobs would likely not have been located in Colorado, the bill requires employers to state that without the credit the probability of locating the jobs in Colorado would be reduced.

The sponsors discussed the bill and the fiscal note. They distributed a list of the companies that have benefitted from the job growth incentive tax credit (Attachment A) and a letter of support from the Denver South Economic Development Partnership (Attachment B). The sponsors responded to questions from the committee on the fiscal note as it relates to state income and sales taxes.

140204 AttachA.pdf

140204 AttachB.pdf

01:48 PM -- Carol Hedges, representing the Colorado Fiscal Institute (CFI), testified against the bill. Ms. Hedges distributed a copy of her presentation (Attachment C). She discussed the purpose of her organization, and her organizations issues with the bill. Ms. Hedges responded to questions from the committee and the sponsors.

140204 AttachC.pdf

01:58 PM -- Ken Lund, representing the Office of Economic Development and International Trade (OEDIT), testified in support of the bill. Mr. Lund discussed tax incentive programs in other states and discussed the bill's ability to give the state economy a competitive advantage. Director Lund distributed and discussed a handout of tax incentive scenarios created by OEDIT (Attachment D). Director Lund responded to questions from the committee on incentives in rural areas.

140204 AttachD.pdf

02:15 PM

Representative DelGrosso distributed two amendments, Amendment L.001 (Attachment E) and Amendment L.002 (Attachment F), and asked Director Lund to discuss them both. Director Lund and the sponsors continued to respond to questions from the committee.

140204 AttachE.pdf

140204 AttachF.pdf

02:20 PM -- Pam Reichert, representing the Metro Denver Economic Development Corporation, testified in support of the bill. Vice President Reichert discussed the purpose of her organization. She discussed the disincentives Colorado faces as a higher wage state. She stated that this bill's three year extension of the five year tax credit authorized in House Bill 13-1287 will allow companies who receive the incentive later to receive the full benefit. She discussed the successes of the incentive program.

02:27 PM -- Patrick Boyle, representing the Colorado Competitive Council (C3) and the Colorado Association of Congress and Industry (CACI), testified in support of the bill. Mr. Boyle stated that these organizations have supported the tax incentive program from the beginning.

02:30 PM -- Preston Gibson, representing the Economic Development Council of Colorado, testified in support of the bill. He distributed a handout to the committee (Attachment G). He stated that he was authorized to express support from Metro North Chamber of Commerce, the South Metro Denver Chamber, and the Aurora Chamber of Commerce. He listed companies that have benefitted from the incentive, and discussed the level of competition in attracting businesses.

140204 AttachG.pdf

02:34 PM

The sponsors presented their amendments.


BILL:	HB14-1014
TIME:	02:34:30 PM
MOVED:	Kraft-Tharp
MOTION:	Adopt amendment L.001 The motion passed without objection.
SECONDED:	Rosenthal
		VOTE
	Exum
	Hamner
	Holbert
	Navarro
	Nordberg
	Rosenthal
	Ryden
	Szabo
	Wright
	Kraft-Tharp
	Williams

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB14-1014
TIME:	02:35:40 PM
MOVED:	Kraft-Tharp
MOTION:	Adopt amendment L.002 The motion passed without objection.
SECONDED:	Holbert
		VOTE
	Exum
	Hamner
	Holbert
	Navarro
	Nordberg
	Rosenthal
	Ryden
	Szabo
	Wright
	Kraft-Tharp
	Williams

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

02:36 PM

The sponsors delivered closing remarks.


BILL:	HB14-1014
TIME:	02:37:07 PM
MOVED:	Kraft-Tharp
MOTION:	Refer House Bill 14-1014, as amended, to the Committee on Finance. The motion passed on a vote of 11-0.
SECONDED:	Holbert
		VOTE
	Exum	Yes
	Hamner	Yes
	Holbert	Yes
	Navarro	Yes
	Nordberg	Yes
	Rosenthal	Yes
	Ryden	Yes
	Szabo	Yes
	Wright	Yes
	Kraft-Tharp	Yes
	Williams	Yes

Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:38 PM

The committee took a brief recess.

02:42 PM -- House Bill 14-1093

The committee came back to order. Representative Duran, sponsor, presented House Bill 14-1093, concerning the creation of the Creative District Community Loan Fund (fund) in OEDIT. Loans or loan guarantees of up to $250,000 per project are made and administered by the Creative Industries Division (division) of OEDIT. Funding for loans is subject to appropriations to the fund. If not fully expended, appropriations to the fund remain available for loans in the next fiscal year. Representative Duran distributed two amendments, Amendment L.003 (Attachment H) and Amendment L.004 (Attachment I). The sponsor responded to questions from the committee specific to the matching moneys, the loan process, and what the loans can be used for.

140204 AttachH.pdf

140204 AttachI.pdf

02:48 PM

Questions from the committee continued on loan default scenarios and the payback window for borrowers.

02:52 PM -- Ken Lund, representing OEDIT, testified in support of the bill. Director Lund provided background on the division. He discussed how OEDIT will approach the loan process and rulemaking. Director Lund responded to questions from the committee.

03:02 PM

Director Lund continued to respond to questions from the committee about the loan application and approval process.

03:09 PM -- Jen Coates, representing the Ridgway Creative District, testified in support of the bill. Town Manager Coates discussed the positive effect the creative district designation has had on her town. Ms. Coates offered several scenarios of how the fund could be utilized to improve infrastructure in the town of Ridgway. The committee thanked her for driving from Ridgway to deliver her testimony.

03:17 PM -- John Batey, representing the Urban Renewal Authority in Pueblo, testified in support of the bill. Mr. Batey discussed the ability of the creative industries to revitalize urban areas, and the successes of the Pueblo Creative Corridor. The committee thanked him for driving from Pueblo to deliver his testimony.

03:22 PM -- Jack Pappalardo, representing Denver's Art District on Santa Fe, testified in support of the bill. Mr. Pappalardo stated that prior testimony summed up the benefits of creative districts. He discussed specifics of how the Art District on Santa Fe developed and the district's future goals as they relate to the fund.

03:27 PM

The sponsor discussed Amendment L.003 and Amendment L.004.


BILL:	HB14-1093
TIME:	03:29:36 PM
MOVED:	Kraft-Tharp
MOTION:	Adopt amendment L.003 The motion passed without objection.
SECONDED:	Ryden
		VOTE
	Exum
	Hamner
	Holbert
	Navarro
	Nordberg
	Rosenthal
	Ryden
	Szabo
	Wright
	Kraft-Tharp
	Williams

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB14-1093
TIME:	03:31:20 PM
MOVED:	Kraft-Tharp
MOTION:	Adopt amendment L.004. The motion passed without objection.
SECONDED:	Hamner
		VOTE
	Exum
	Hamner
	Holbert
	Navarro
	Nordberg
	Rosenthal
	Ryden
	Szabo
	Wright
	Kraft-Tharp
	Williams

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

03:31 PM

The sponsor delivered closing remarks.


BILL:	HB14-1093
TIME:	03:33:56 PM
MOVED:	Kraft-Tharp
MOTION:	Refer House Bill 14-1093, as amended, to the Committee on Appropriations. The motion passed on a vote of 7-4.
SECONDED:	Hamner
		VOTE
	Exum	Yes
	Hamner	Yes
	Holbert	No
	Navarro	No
	Nordberg	No
	Rosenthal	Yes
	Ryden	Yes
	Szabo	No
	Wright	Yes
	Kraft-Tharp	Yes
	Williams	Yes

Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:34 PM -- House Bill 14-1070

Representative Lawrence, sponsor, presented House Bill 14-1070, concerning the requirement that a county government use a competitive bidding process for procurement contracts over a certain dollar amount. The bill requires county governments to hold a competitive bidding process if a single construction contract is reasonably expected to cost $100,000 or more. Representative Lawrence stated that her bill's competitive bidding process mirrors the state bidding process, and will help smaller and women- and minority-owned businesses compete for contracts. She stated that the bill affords exceptions to the bidding process. Representative Lawrence discussed the high overhead cost to counties of having expensive construction equipment that is not always in use. She stated that private contractors offer a level of expertise, as well as bonds and insurance, which would prevent taxpayers from paying double for a failed work project.

03:45 PM -- Pat Ratliff, representing Colorado Counties, Inc. (CCI), testified against the bill. Ms. Ratliff stated that the counties overwhelmingly opposed this bill in a recent meeting. She explained how the bill would negatively impact counties.

03:49 PM -- Ted Orf, representing Associated Governments of Northwest Colorado, testified against the bill. Mr. Orf discussed the negative impact the bill would have on county jobs in rural Colorado.

03:53 PM -- Michael Gifford, representing the Associated General Contractors of Colorado, testified in support of the bill. He discussed his organization's desire to see county maintenance and construction project go to private construction firms.

03:55 PM -- Derek Garben, representing himself, testified in support of the bill. Mr. Garben discussed his small contracting business and his reasons for supporting the bill.

03:57 PM -- Ted Ott, representing himself, testified in support of the bill. He discussed his small contracting business, Colorado Barricade, and the reasons that small contracting businesses like his should be part of a competitive bidding process for county projects.

04:04 PM -- Jack Hilbert, representing himself, testified in support of the bill. Commissioner Hilbert discussed his experience with county construction projects during his time as a county commissioner for Douglas County and as a city councilman in Parker. He offered examples of how private contractors can be more cost-effective in building county infrastructure. Commissioner Hilbert responded to questions from the committee.

04:14 PM -- Tony Milo, representing the Colorado Contractors Association, testified in support of the bill. Mr. Milo discussed his organization. He reiterated the testimony of Commissioner Hilbert and the small contractors who testified before him, and discussed the advantages of the bill.

04:17 PM -- Dave Davia, representing the Colorado Association of Mechanical and Plumbing Contractors, testified in support of the bill. He discussed his organization's support of the bill, as well as the Building Jobs4Colorado coalition's support of the bill. He discussed the impact of construction jobs on the state's economy. Mr. Davia responded to questions from the committee.

04:26 PM

The sponsor delivered closing remarks.


BILL:	HB14-1070
TIME:	04:27:01 PM
MOVED:	Holbert
MOTION:	Refer House Bill 14-1070 to the Committee of the Whole. The motion failed on a vote of 5-6.
SECONDED:	Szabo
		VOTE
	Exum	No
	Hamner	No
	Holbert	Yes
	Navarro	Yes
	Nordberg	Yes
	Rosenthal	No
	Ryden	No
	Szabo	Yes
	Wright	Yes
	Kraft-Tharp	No
	Williams	No

Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB14-1070
TIME:	04:30:40 PM
MOVED:	Kraft-Tharp
MOTION:	Postpone House Bill 14-1070 indefinitely. The motion passed on a vote of 6-5.
SECONDED:	Ryden
		VOTE
	Exum	Yes
	Hamner	Yes
	Holbert	No
	Navarro	No
	Nordberg	No
	Rosenthal	Yes
	Ryden	Yes
	Szabo	No
	Wright	No
	Kraft-Tharp	Yes
	Williams	Yes

Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:31 PM -- House Bill 14-1071

Representative Rankin, sponsor, presented House Bill 14-1071, concerning voter approval of a proposed brand marketing plan for the state. The bill suspends the BrandCOLORADO Initiative in OEDIT, including the use of the new state logo developed as part of the initiative. A ballot question on whether to continue the initiative is referred to the voters, and, if approved, would allow the initiative and use of the logo to resume. Representative Rankin discussed the precedent set by other state logos and emblems that have undergone legislative scrutiny. A packet of the state branding campaign from OEDIT was distributed to the committee (Attachment J). Written testimony from a witness who had to leave the committee due to time constraints was distributed to the committee (Attachment K). The sponsor responded to questions from the committee.

140204 AttachJ.pdf

140204 AttachK.pdf

04:41 PM

The committee continued to ask questions of the sponsor.

04:56 PM -- Bill Zepernick, Legislative Council Staff, came to the table to address a question about the fiscal impact of the bill as it relates to the state's Ballot Information Book.

05:01 PM

Committee discussion with the sponsor continued.

05:03 PM -- Hugh Fowler, representing himself, testified in support of the bill. Former State Senator Fowler discussed his issues with the new state brand. He pointed to the recognized state symbols as the brand of Colorado and stated his concerns that this brand initiative breaks with the state's history.

05:14 PM -- John Scaggs, representing Haystack Mountain Goat Dairy, testified against the bill. Mr. Scaggs discussed his work as the sales and marketing director for the dairy. He stated that his business loves the logo and is using it on its products at no added cost to the company. Mr. Scaggs responded to questions from the committee.

05:20 PM -- Peter Johnson, representing the Van Heyst Group and Startup Phenomenon, testified against the bill. He stated his hope that the legislature not hamper the successful efforts of a branding campaign that has come at a time where Colorado is poised to be a major economic driver in the country.

05:26 PM -- Brian Burney, representing Oliver, testified against the bill. He distributed a handout to the committee (Attachment L). Mr. Burney discussed his involvement in the creation of the state brand at OEDIT. He stated his belief that a state brand is essential in today's market, and that the state's brand initiative will give Colorado a new level of recognition. Mr. Burney responded to questions from the committee and the sponsor.

140204 AttachL.pdf

05:41 PM -- Pam Pleasant Foster, representing herself, testified in support of the bill. Ms. Foster stated her belief that the branding initiative should have been more transparent. She stated that her concern is with the process.

05:47 PM -- Kim Coupounas, representing GoLite, testified against the bill. She stated that the brand initiative has the ability to build the state's reputation and bolster the state's economy. She stated that having this logo unifies businesses across industries. She stated that she was very impressed with the work of the state branding team and their stakeholder process. Ms. Coupounas responded to questions from the committee.

05:52 PM

Representative Rankin made closing remarks.


BILL:	HB14-1071
TIME:	05:52:42 PM
MOVED:	Holbert
MOTION:	Refer House Bill 14-1071 to the Committee on Appropriations. The motion failed on a vote of 5-6.
SECONDED:	Wright
		VOTE
	Exum	No
	Hamner	No
	Holbert	Yes
	Navarro	Yes
	Nordberg	Yes
	Rosenthal	No
	Ryden	No
	Szabo	Yes
	Wright	Yes
	Kraft-Tharp	No
	Williams	No

Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB14-1071
TIME:	06:02:01 PM
MOVED:	Rosenthal
MOTION:	Postpone House Bill 14-1071 indefinitely. The motion passed on a vote of 6-5.
SECONDED:	Ryden
		VOTE
	Exum	Yes
	Hamner	Yes
	Holbert	No
	Navarro	No
	Nordberg	No
	Rosenthal	Yes
	Ryden	Yes
	Szabo	No
	Wright	No
	Kraft-Tharp	Yes
	Williams	Yes

Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

06:02 PM

The committee adjourned.